As President Trump prepares to meet Chinese leader Xi Jinping in a high-stakes attempt to ease renewed trade tensions, another front in America’s economic rivalry with China is emerging: the race for global biotech leadership. Just as U.S. leadership in shipbuilding and semiconductors slipped away in past decades, the country now risks ceding biomedical innovation to China at the very moment when biotech defines both national strength and health security.

When looking at the past century, a clear pattern has emerged of the U.S. rising as the manufacturing star of essential goods, only to hand the business to China. We’ve seen it with shipbuilding. We’ve seen it with semiconductors. And it’s currently happening with biomedical research.

At the end of World War I, it was clear that the United States was woefully weak in maritime capabilities, both commercial and defense, and dependent on Great Britain, France, and Italy for ships and shipping lane control. In response, Congress passed legislation investing in U.S. shipping and shipbuilding capacity. In just 30 years, the U.S. built 7,800 ships, and, by World War II, had become the world’s leading shipbuilder. In addition, the U.S. also positioned itself as the leader in setting the market rules for shipping, establishing the Federal Maritime Commission (FMC), which regulated the worldwide industry.

But during the 1980s, the U.S. abandoned its leadership position in shipbuilding and shipping leadership, stripping the FMC of its ability to regulate shipping lanes, ending subsidies to American companies, and reducing production to just a few ships per year. Companies were sold and other countries took the lead, most importantly China.

Today, according to a report from the Open Markets Institute, China produces 60% of all ships built in the world, 80% of the ship-to-shore cranes, 90% of the sea containers, and 86% of the truck chassis that these containers are loaded onto. Meanwhile, only a paltry 0.13% of large shipping vessels are produced by the U.S. and 90% of the U.S. container shipping trade is controlled by a three-company cartel.


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Similarly, the U.S. established a leadership position in semiconductor chips, just to yield it to other countries, including China, which have ambitious government incentives. According to the Semiconductor Industry Association, U.S. production has decreased from 37% in 1990 to barely 10% today. Realizing the criticality of chips from the perspective of technical, security, and military leadership, the U.S. government is now trying to buy our way back into the game with the $4 billion CHIPS Act, but costs have increased and the manufacturing workforce has declined. The damage has already been done. 

The U.S. government is now making the same mistake with biomedical research. Over the past 50 years, we have established a position as the world’s leader in biotechnology, but we’re quickly relinquishing that, with reduced government funding in research, threats of tariffs on pharmaceutical products, drug pricing policies that are pushing investors away, and a loss of talent at agencies that fund and regulate innovative companies. Most recently, Congress did not renew decades-long federal grant programs that fund innovative companies known as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR), stripping the biomedical industry of its funding lifeline and threatening research projects throughout the country.  

Meanwhile, China has grown in biotech stature from a provider of low-quality bulk drug substance to a sought-after partner for preclinical services, providing speed, timing, and quality to pharmaceutical companies around the world. China, a country previously known for its copycat generics, now provides 28% of the world’s drugs in development, including first-in-class drugs. For example, the vast majority of the 600 bispecific antibodies, a highly promising immune-oncology treatment, comes from China. After significant regulatory reforms in 2015, China has launched thousands of biotech startups and gone from low-cost, low-quality discovery to faster, cheaper, and high-quality innovative drugs that rivals anything in the world.

The United States’ abandonment of shipbuilding and semiconductor manufacturing has threatened our leadership position and our national security by allowing our geopolitical adversaries to take over the lead. Likewise, ignoring the critical biomedical research sector also threatens our national interests. For example, China controls 80% of the world’s supply of heparin, a critical anticoagulant used more than 300,000 times each day in U.S. hospitals. China could turn off the supply of heparin to the U.S. and thousands of Americans would die.

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The solution is straightforward. In order to maintain its leadership position in biomedical research and give hope to patients seeking treatments and cures, the U.S. must continue to invest in the ecosystem of biomedical discovery and development through policies that prioritize the biomedical sector’s growth. That includes increasing funding for agencies that support basic research such as the National Institutes of Health, reauthorizing the SBIR/STTR programs that drive small companies’ innovation, modernizing clinical studies through artificial intelligence and other advancements, and establishing drug pricing and trade policies that are fair and encourage the research and development of innovative products.

If America truly wants to retain its leadership in biomedical innovation, biotechnology must be treated not as a cost center to control, but as a strategic industry to protect, as essential to our future as energy, defense, or semiconductors. This week’s meeting between Trump and Xi will hopefully be a good indicator of the future relationship between the two countries as both can benefit from a lessened trade war, stability in the marketplace and a partnership that maintains trusted Chinese preclinical services for U.S. biotech companies while ensuring intellectual property protections of U.S. innovation.

Tim Scott is president and CEO of Biocom California, the state’s leading life science advocacy organization.