Lawmakers urge Biden to call out more Chinese biotech firms

By Karen Freifeld

(Reuters) - A Republican and a Democratic member of Congress are calling on the Biden administration to add seven Chinese biotech firms to a list created by the Defense Department to highlight firms it says are allegedly working with Beijing's military.

In a letter dated March 29 seen by Reuters, Republican Michael Gallagher and Democrat Raja Krishnamoorthi asked Defense Secretary Lloyd Austin to take the action since Beijing could harness the power of biotechnology to strengthen its military.

"Urgent action is needed," said the lawmakers, who serve as the chairman and ranking member of the Select Committee on the Chinese Communist Party, citing risks that China could "create synthetic pathogens" to gain military advantage.

The Chinese Embassy in Washington and the Defense Department did not immediately respond to requests for comment.

The letter is the latest sign of growing concern in Washington about China's biotech sector. The U.S. Congress is considering legislation to bar federal agencies from contracting with China's BGI Group and WuXi AppTec, among others, as part of an effort to keep China from accessing American genetic data and personal health information.

U.S. intelligence officials in late February told senators working on the bill that Chinese pharmaceutical firm WuXi AppTec (603259.SS) had transferred U.S. intellectual property to Beijing without consent, Reuters reported.

Being placed on the Pentagon's Chinese military-backed companies list doesn't involve immediate bans. However, it can be a blow to companies' reputations and represents a warning to U.S. firms considering doing business with them. It could also put pressure on the Treasury Department to sanction them.

In their letter, Gallagher and Krishnamoorthi call for the addition of Innomics and STOmics, which they allege are subsidiaries of BGI group, which was added to the list in 2022.

Reuters reported in 2021 that BGI has made sales worldwide of prenatal tests developed in collaboration with China's military and has used them to collect genetic data from millions of women for sweeping research on traits of populations.

BGI has said it is not controlled by the Chinese government or military and that it respects human rights.

The letter also names Origincell, for allegedly operating a bio-storage cell tank and having ties to the Chinese military and Vazyme Biotech, which allegedly makes bioactive compounds and has investors with ties to the military.

The companies did not immediately respond to requests for comment.

(Reporting by Karen Freifeld; Editing by Alexandra Alper, Alexandra Hudson)