The blinding spotlight on artificial intelligence has obscured the intensifying U.S.-China competition in biotech, particularly as China is racing to close the gap on research and development, innovation, and commercialization. Much like AI, biotech has become securitized, and the U.S. government has employed a similar economic coercion toolkit against Chinese biotech companies. 

Two companies stand out: BGI and WuXi AppTec. The former’s subsidiaries were placed on the Commerce Department’s Entity List in 2020 and both were designated “Chinese military companies (CMC)” on the Pentagon’s Section 1260H list in 2026. Each company’s response to U.S. sanctions, however, could not have been more different. BGI chose to embrace Beijing while WuXi stridently asserted its independence and global identity. 

The divergence of firm and state interests are real and tangible, yet Beijing has nonetheless found ways to claim political wins without compelling political fealty. For BGI, alignment with Beijing’s agenda was likely also good for business. For WuXi, the opposite was true because it must maintain credibility in the global market. Although each company’s strategy was largely anchored in their own interests and business models, Beijing can still score a narrative win irrespective of how each company responded. That narrative is that Chinese companies won’t succumb to U.S. sanctions and will succeed despite it, whether they’re private or state firms.   

How the Two Firms Diverge

Facing U.S. government sanctions, BGI realized that Western markets are likely to remain restrictive because its core business—genetic and biological data—is being increasingly securitized around the world, including in China itself. Despite decades of BGI’s commercialization and international expansion, its close relationship with the Chinese state has facilitated its global expansion while simultaneously increasing scrutiny over its activities overseas. China’s Biosecurity Law has further reinforced perceptions that BGI’s operations are closely intertwined with national security interests. For BGI, distancing itself from Beijing would do little to alleviate these concerns.

The company also has less of a stake in the U.S. market, as its revenue there was already declining and its subsidiary MGI Tech divested its U.S. unit in 2026 due to geopolitical tensions. The smart and rational play for the company was to align with Beijing’s Health Silk Road and “community of shared future” agenda and tap into Global South markets. There is essentially no competition for BGI in many of the developing economies where it seeks market access.

WuXi, on the other hand, has doubled down on its global, rather than Chinese, identity. That’s because roughly two-thirds of its revenue (about 64 percent in 2025) still comes from the U.S. market, despite mounting U.S. pressure since 2024. The firm’s core business provides highly fungible manufacturing and research services that are deeply embedded in global supply chains. It has substantial American operations, diversified international investors, and deep partnerships with leading U.S. biopharmaceutical companies like Eli Lilly.

Taking a chapter out of U.S. firms’ playbooks, WuXi has leveraged legal instruments and communication campaigns to parry the charges thrown at it and defend itself. It has created considerable daylight between itself and the likes of BGI by arguing that as a “foreign-invested enterprise” in China, it is legally prohibited from engaging in genomic sequencing activities. In fact, it sued the U.S. Department of Defense for its CMC designation and recently won the case in U.S. court.

WuXi has been consistent and vocal about being an “independent, publicly traded company,” a reputation on which its commercial success rests. It must maintain credibility as an independent multinational corporation to be able to operate in key Western markets that compose the bulk of its revenue.

Beijing Tolerates Difference

So far, Beijing has taken a light-touch approach to both BGI’s embrace and WuXi’s ostensible distancing. That’s because Beijing can use both approaches to justify its actions against the United States, bolster its own supply chain resilience, and expand into markets outside of U.S. influence. When Chinese firms are under pressure, Beijing’s ultimate goal appears to be about preserving firms’ maximum room to operate, particularly in a dynamic and strategic sector like biotech that aligns with the state’s technological ambitions.

For instance, BGI’s pivot toward the Global South means its projects and investments can exert influence over technology and standards where it operates, such as national genome projects across Indonesia and Thailand.

From Beijing’s standpoint, WuXi’s importance in the global supply chain accrues a reputational dividend for the Chinese state and helps justify the government’s response to U.S. actions. On the first point, WuXi’s continued success demonstrates that Chinese labs, facilities, and technical know-how cannot simply be designed out of the global supply chain and that Western pharmaceutical companies continue to depend on China. On the second, that WuXi is an independent and private company shows U.S. overreach in politicizing commerce, abusing extraterritorial jurisdiction, and rupturing the global trading system.

In fact, WuXi’s very distance from the state makes that narrative more convincing than it could ever be if the company sounded like an arm of Beijing. The Chinese state, therefore, has little reason to demand allegiance from such a firm because its global access is what makes it valuable.

Firm Positions, Loosely Applied

As creeping securitization encroaches on all technology sectors, there is a growing tendency to lump all Chinese companies under the “national team” orchestrated by Beijing. That lack of differentiation is premised on the assumption that Beijing strong-arms all companies, private or state-owned, to do its bidding. 

Yet as these cases in the biotech sector show, while Beijing may hold firm stances on how firms ought to behave, it’s a stance that’s loosely applied in reality. Beijing appears just as likely to leave the companies alone as it is bent on tethering them on a short leash. It does not need every tech champion to rally around the flag. While it certainly prefers some firms to carry water into new markets, it also wants others to hold their market positions that keep China as an indispensable part of global supply chains. BGI does the first while WuXi AppTec the second.

Rather than impose a single line, the state lets firms adapt to their own circumstances and finds a way to reap the benefits—which often is sufficient to satisfy Beijing’s mandarins. The question is not simply that of firm-state alignment but rather how and when the Chinese state rides on the coattails of firm success to claim credit for state objectives regardless of alignment. Beijing does not require a firm’s loyalty to benefit from its success. But Washington’s growing tendency to treat all Chinese tech firms alike risks turning that assumption into a self-fulfilling prophecy by forcing them to hew closer to Beijing.

Editor’s note: Two small changes have been made. In one place, we clarified that there aren’t specifically market restrictions on WuXi but rather government pressure. And a sentence referring to WuXi’s ownership of IP has been deleted, as the company does not own customer IP.