The US Treasury Department is developing a sector-specific framework that is expected to enable most US pharmaceutical companies to move forward with licensing agreements and investments in China, Reuters reported on Friday, citing sources.
Instead of applying a broad ban across the entire industry, the proposed regulations seek to apply restrictions in high-risk areas, including pathogens and biotechnology that could be used for weaponisation purposes.
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That would represent a shift from the Trump administration's move to restrict business ties with China in other sectors under new national security laws.
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Certain US lawmakers and smaller pharmaceutical companies disagree with the approach, viewing such investment as a national-security threat that could weaken the US's leading position in medicine development, the report said.
The rules might enable billions of dollars in deals to bolster US companies' drug pipelines and offer capital to Chinese firms. According to research firm GlobalData, licensing deals involving Chinese biotech companies totalled $115 billion last year.
Chinese President Xi Jinping is scheduled to meet with Trump in the United States next week. According to the sources cited by Reuters, it is unlikely that Treasury will announce any new regulations regarding pharmaceutical investments before the meeting.
The economic competition between the US and China has intensified, as Washington seeks to curb China's growing influence in sectors such as technology, semiconductors, and electric vehicles.
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