China Biotech 2026: America Against America

Authored by Morgan Xu, PhD, JD(LinkedIn)dictated, ChatGPT transcribed; 

Part I — Two Fathers, Two Systems

Last August, after another China trip, I published my China Biotech 2025 – Trip Takeaways, based on conversations with over 20 industry insiders and leaders. A year later, I went back—this time for three weeks, traveling farther and talking with many more people across biotech, Big Pharma, investing, BD, law and the broader innovation ecosystem.

If anything, the energy around China biotech has intensified. But something else changed. Last year, I went to China mostly feeling China biotech’s pulse. This year, China biotech made me think much more about America.

One flagship stop was the inaugural China Pharmaceutical Innovation Conference, CPIC, in Shanghai. I already published some quick reflections, subsequently published in English and Chinese by the conference organizers, so I will not repeat them here. 

My short version: the energy was extraordinary. CPIC assembled something close to a Who’s Who of China biotech, with an unusual density of founders, executives, scientists, BD leaders, investors, policymakers and service providers. Sometimes the best conference session is the one you never scheduled—the hallway encounter or lunch conversation that unexpectedly plants the seed for a license, investment or NewCo. In my own practice, those seeds often land on my desk months later as term sheets whose structure was largely set in that hallway. I have seen that from both sides of the table, with MNC licensees and China-based licensors alike.

That is also why I have reproduced my WeChat[ WeChat is China’s super app. It is the engine behind China’s speed and, sadly, behind people’s misery: the plus is that you can reach anyone through it; the minus is that it is so intrusive that it keeps everyone on call 24/7. It combines a cell phone, WhatsApp, Facebook, the App Store, Uber, and everything else you need in daily life. For anyone who wants to plug into China’s biotech ecosystem, step one is to set up a WeChat account and connect with me or another super connector. One interesting tidbit – during CPIC, I met the first person whose WeChat friends exceeded the capped maximum (~10K?). Of course, he is a top, thriving biotech founder.] posts and screenshots throughout this trilogy. These posts were written in the moment, while I was still feeling the excitement of three weeks in China—at CPIC, in conversations with industry insiders, and in the sheer energy of the ecosystem. That excitement touched a sentimental nerve, and I found myself gushing out poetry, because some moments were genuinely poetic. I have left the screenshots and verses largely as written, rather than polishing away the moment.

Underneath all the excitement, however, I sensed plenty of anxiety and uncertainty. The science is there. The people are there. The infrastructure is there. The work ethic is certainly there. Increasingly, the assets are there. The harder question is whether regulation, capital, governance and cross-border structures can evolve fast enough to keep up.

¹WeChat is China’s super app. It is the engine behind China’s speed and, sadly, behind people’s misery: the plus is that you can reach anyone through it; the minus is that it is so intrusive that it keeps everyone on call 24/7. It combines a cell phone, WhatsApp, Facebook, the App Store, Uber, and everything else you need in daily life. For anyone who wants to plug into China’s biotech ecosystem, step one is to set up a WeChat account and connect with me or another super connector. One interesting tidbit – during CPIC, I met the first person whose WeChat friends exceeded the capped maximum (~10K?). Of course, he is a top, thriving biotech founder.

Father’s love, two very different stories

Let me start somewhere far away from BINSA, CFIUS and geopolitics: parents trying to cure their children.

In the U.S., Matt Wilsey built Grace Science around finding a treatment for his daughter Grace’s ultra-rare NGLY1 deficiency. After years of fundraising, science and clinical development, the company’s gene therapy now faces an FDA manufacturing-related obstacle that Wilsey believes could kill the program. He responded in a very American way: he went public, talked to journalists and challenged the regulator. FDA may ultimately be right, Wilsey may be right, or the truth may lie somewhere between. What interests me is that the disagreement itself became public and contestable.

Around the same time, two Chinese patient deaths from experimental genetic-medicine IITs finally became public (a third one was published this week while I was finalizing this writing). 

First, Science reported in July a six-year-old girl, “Mei,” who died seven days after receiving an experimental brain-directed base-editing treatment at Xinhua Hospital. The hospital’s emergency ethics panel later concluded the death was definitely related to the therapy. The report raised serious questions about preclinical toxicology, informed consent, financing and oversight, but one small detail also stayed with me: when Mei deteriorated, the Principal Investigator, Zilong Qiu returned to the hospital and reportedly remained with her parents through the night until the physician told them the next morning that their daughter had died. Her father recalled Qiu being in shock.

That detail matters because reality is rarely divided neatly between heroes and villains. A scientist can care deeply about a patient and still make judgments that later appear wrong. Parents can knowingly accept experimental risk and still not fully understand its magnitude. Scientists, physicians, companies, parents and regulators can all be blinded by hope. This is precisely why systems matter even when the people involved mean well.

A second death involved HuidaGene’s experimental DMD therapy. The participant died in August 2025 after high-dose systemic AAV treatment, but the death became public only in August 2026, when HuidaGene disclosed severe complement and cytokine activation and acute respiratory distress syndrome. STAT reported that the disclosure followed months of reporting and questions to the company. I would not speculate about why the company chose that particular moment to disclose, but the broader fact is uncomfortable: two deaths occurring in 2025 became publicized only in the summer of 2026 after journalists started asking questions.

Death is sometimes a risk. Silence is a choice.

A death during a high-risk first-in-human study is a tragedy, but it is not automatically evidence of misconduct. Gene therapy can cause severe immune toxicity. First-in-human medicine exists precisely because we do not know everything. If society insists on zero risk, society has effectively decided on zero first-in-human innovation.

Disclosure is different. Biological risk may sometimes be unavoidable. An information vacuum is not.

Some Chinese friends I respect believe Western reporting of these cases was overly negative or fitted into an existing narrative about Chinese science. Maybe there is some truth there. But complaining about the media coverage is not a communications strategy. If you leave a vacuum, somebody else writes your story.

Some of the sensationalism—or occasional distortion—in Western coverage may reflect both China’s opacity and Western naivete, or simply a lack of access. Very few non-Chinese biotech leaders can read Chinese, much less follow the context behind the headlines. Those of us who understand and are connected to both ecosystems can work harder to build bridges, improve communication and create value, rather than simply complain from the sidelines. And, in the interest of full disclosure, our bridge-building efforts will also get paid too.

Meanwhile, for China biotech leaders increasingly operating globally, press or crisis communication has become part of biotech infrastructure. That does not mean readily admitting liability, violating patient privacy or speculating before the science is understood. It means explaining what happened, what is known, what remains uncertain, what was reported, and what changed. Lawyers, scientists, management and communications professionals should be part of that process from the beginning. In my experience, strategizing and diligence preparation often hold the key to avoid surprises or blowbacks later.

818 and the search for a new equilibrium

These deaths arrive at exactly the moment China’s IIT ecosystem is searching for a new equilibrium under the strengthened “818” framework. For years, China’s dual-track system (IND + IIT) gave sophisticated hospitals and investigators considerable room to conduct biomedical innovation outside the conventional commercial NMPA pathway. That flexibility could accelerate experimentation. It also concentrated more responsibility at the hospital and investigator level.

Many Western biotech executives, entrepreneurs and investors have consulted me to understand China’s IIT pathway and the recent “818” regulations. The question I kept hearing was whether China’s IIT pathway was, is, or remains the Wild West for first-in-human clinical trials. Appropriate or not, I also at times labeled it a gold rush.

Does the dual-track model survive? I think so, but probably in a different form. Some flexibility will disappear, more oversight will appear, and some programs that once moved forward may not. Yet China is unlikely to surrender its speed advantage completely.

The irony is fascinating. Americans frustrated with FDA have spent years asking why America cannot move more like China. China is now confronting the other side of that question: what does speed cost when safeguards fail?

Safety versus innovation is therefore the wrong binary. Every functioning regulatory system accepts some risk. Too little oversight can injure patients and destroy trust. Too much can prevent potentially lifesaving medicines from ever reaching them.

Trust is not the enemy of speed. Trust is infrastructure for sustainable speed.

That is the lesson I take from these cases—not that Chinese scientists do not care, not that IITs are inherently reckless, and certainly not that every FDA requirement is wise. Good intentions are not substitutes for systems, and good systems must protect patients without suffocating the people trying to help them.

While I was in China, I missed an Endpoints debate at MIT over China’s biotech rise and America’s response. Hawks emphasized industrial erosion and national security; the other side emphasized capital efficiency, global science and patients. The existence of such an argument reminded me of China’s Politburo Member, Wang Huning’s America Against America. Americans constantly fight—industry versus regulators, labor versus capital, hawks versus doves, protectionists versus globalists—but perhaps the noise performs a function.

A ship whose crew constantly argues about direction may be exhausting. At least someone is allowed to yell when he sees a waterfall.

A perfectly quiet ship may move faster. Until it doesn’t.

Next: Why does China’s biotech machine move so fast—and can everybody keep driving 120 MPH forever?