Red Genes: Assessing WuXi AppTec's Ties to the Party-Army-State in China

Executive Summary:

WuXi AppTec, a major Chinese biotechnology and pharmaceutical firm, claimed that the company has not, does not, and will not pose a national security risk to any country in response to new legislation introduced in the US Congress.
The company’s claims are undermined by WuXi Apptec’s network of relationships with the Chinese Communist Party (CCP), involvement in the Military-Civil Fusion Development Strategy, and alignment with the People’s Republic of China’s (PRC) national development plans.
CCP leaders have stated that increasing the PRC’s scientific and technological power is key to global influence and long-term economic development. Biotechnology is one of the strategic industries prioritized in PRC economic planning.
WuXi AppTec and its subsidiaries’ track record with handling genomic data is cause for privacy concerns, especially given the company’s known collaboration with the CCP and the PLA.

At the end of January, the future of biotechnology and pharmaceutical firm WuXi AppTec (无锡药明康德新药开发股份有限公司; 药明康德) was cast into uncertainty following the introduction of the “BIOSECURE Act” to the US Congress (Select Committee on the CCP, January 25). The proposed legislation included the company on a list of “Biotechnology Companies of Concern.” It further suggested the prevention of US taxpayer funds from flowing to biotechnology firms based in foreign countries of concern or the purchase of biotechnology equipment from such firms that could facilitate the transfer of US persons’ genetic data to a foreign adversary.

WuXi AppTec—and its sister company, WuXi Biologics (药明生物)—are key players in the biotechnology industry within the People’s Republic of China (PRC) and are among the country’s largest private enterprises. Although operating as independent companies, they share the same CEO. They are both committed to providing integrated end-to-end solutions through their global Contract Testing, Development, and Manufacturing Organization (CTDMO) platform, WuXi Biology, which accelerates the market entry of cell and gene therapy products (WuXi Biology, accessed February 8). WuXi has been allowed to operate in the United States and Europe despite close ties to the People’s Liberation Army (PLA) and the national strategies of the Chinese Communist Party (CCP).

The announcement of the legislation sent shockwaves throughout the biotechnology industry and severely impacted the companies’ stock market valuations in Shanghai and Hong Kong (Zhihu, January 26; Baijiahao, January 28; Biajiahao, February 2). In response, WuXi AppTec initiated its first ever share buyback, repurchasing about 20 million shares (worth 1 billion Renminbi; $140 million) to stabilize the market, and issued a clarification announcement stating that the company has not, does not, and will not pose a national security risk to any country (Baijiahao, February 5; Zaobao, February 5).

How WuXi AppTec rose to prominence in the PRC and globally provides cause for concern. The PRC’s security laws, like the National Intelligence Law (中华人民共和国国家情报法), that mandate cooperation with the CCP’s military and intelligence apparatus provide a general reason to be skeptical of any PRC company that accumulates personal and corporate data. WuXi appears to have benefitted from and continues to engage with the PRC’s general planning initiatives, the Military-Civil Fusion Development Strategy, and the more recent focus on achieving dominance in science and technology research and development. The potential consequences of the CCP’s inevitable abuse of WuXi’s data require the highest scrutiny to be applied to the company’s statements and operations.

WuXi AppTec in Context: PRC Biotechnology Goals and Strategies

Understanding the risks posed by WuXi AppTec requires understanding the CCP’s strategy for national rejuvenation and increasing the PRC’s global influence. One of the elements of this strategy is becoming the leading global innovation and scientific power. As CCP General Secretary Xi Jinping told his colleagues at the 20th Party Congress, “We must regard science and technology as our primary productive force, talent as our primary resource, and innovation as our primary driver of growth” (Xinhua, October 16, 2022). In addition to mentioning biotechnology specifically in that speech alongside other technologies like artificial intelligence, Xi has repeatedly highlighted the importance of biotechnology elsewhere. For example, Xi told a Politburo study session that “Biosecurity concerns the health and lives of the people, the long-term stability and security of the country, and the sustainable development of the Chinese nation. It is an important component of overall national security and a significant force that affects and even reshapes the global landscape” (MOJ, September 29, 2021). Xi’s words clearly express Beijing’s longstanding commitment to strengthening the PRC’s self-reliance and innovation in biotechnology.

Underpinning Xi’s words is a national biotechnology strategy articulated through its national development plans, demonstrating a clear intent to leverage biotechnology as a pivotal driver of economic and scientific advancement. By the end of the Thirteenth Five-Year Plan (2016-2020), the state had already prioritized the biopharmaceutical industry as a pillar of the national economy (MOST, May 10, 2017). The Fourteenth Five-Year Plan (2021-2025) further emphasized this, particularly through the integration of biomedicine with the latest generation of information technology. Key policy milestones include:

2006: The “National Medium-and Long-Term Science and Technology Development Plan (2006–2020) (国家中长期科学和技术发展规划纲要(2006—2020年)),” issued by the State Council, marked a foundational step toward prioritizing biotechnology and the life sciences. It identified these fields as crucial for sparking a new scientific revolution in the 21st century, with genomics and proteomics (the study of proteins) leading the charge toward a more systematic approach to biotechnological research. The plan emphasized the importance of breakthroughs in functional genomics, the molecular design of drugs and crops, and cutting-edge technologies like biochips, stem cells, and tissue engineering. It also predicted significant advancements in diagnostics, therapeutics, and regenerative medicine (State Council, 2006).
2015: The “Made in China 2025 (中国制造2025)” policy identified pharmaceutical development, including biotechnologies targeting major diseases, as a priority. This encompasses advances in chemical drugs, antibody medicines, and novel vaccines (Global Times, May 2015).
2021: The “Fourteenth Five-Year Pharmaceutical Industry Plan (“十四五”医药工业发展规划)” emphasized improving biopharmaceutical production technologies, notably cell cultivation techniques and recombinant protein vaccines (State Council, February 1, 2022).
2021: The “Fourteenth Five-Year Plan and 2035 Vision (中华人民共和国国民经济和社会发展第十四个五年规划和2035年远景目标纲要)” called for the expansion of strategic emerging industries, including biotechnology. It stressed the importance of integrating biotechnology with information technology to foster the development of biomedicine (State Council, March 12, 2021).

Local initiatives mirror this national ambition. For example, in 2023, Shenzhen’s People’s Congress Standing Committee issued the “Shenzhen Special Economic Zone Cell and Gene Industry Promotion Regulations,” the first piece of special legislation concerning the genetics industry in China (SZRD, January 6, 2023). This move, along with subsequent initiatives like the selection of management organizations for the Shenzhen Cell and Gene Industry Fund, underscores the local government’s commitment to fostering this sector. Also, in 2023, the Beijing Economic and Technological Development Zone announced measures to promote high-quality development in the cell and gene therapy industry, aiming to leverage the city’s innovation and clinical resources (NCSTI, February 23, 2023).

Through carrying out the directives mapped out within these plans and policy documents, the PRC is not only steadily emerging as a global leader in biotechnology but also clearly perceives the sector as a key engine for national development. In this way, key biotechnology firms bear the hallmarks of the PRC’s industrial strategy.

The signature of such firms includes their integration with state-controlled research organizations, companies, and innovation ecosystems. As Barry Naughton and his co-authors recently said, the PRC’s new phase of industrial policy in the Xi era is “characterized by a focus on security and new implementing instruments such as the ‘new-style national team’ and the strengthening of the ‘national strategic science and technology force’ (NSSTF).” [1] Xinhua describes the force as “embody[ing] the will of the Party/State, guided by national strategy, and deployed and organized for the purpose of conquering key core technologies.” This team includes academics from the Chinese Academy of Engineering (CAE), Chinese Academy of Sciences (CAS), and other institutions, alongside enterprises that develop and industrialize the research produced. As the authors write: “We should expect that local government-run high-tech parks … will be delegated substantial responsibility for coordinating these activities on the local level.”

Under Xi Jinping, the CCP has intensified its drive to ensure private industry contributes to national objectives through the creation and extension of party committees in companies. Xi has been clear about the importance of the Party in the governance of private enterprise for years, and the reforms of the united front system in 2015 emphasized the Party’s need to work more closely with entrepreneurs (War on the Rocks, June 24, 2019; CSIS, January 2021). An “Opinion” issued by the Central Committee in September 2020 reiterated the importance of unity between the party-state and business, noting that “Relying on the united front to carry out communication and consultation between government and enterprises is the key to building friendly and clean relationships between government and businesses.” It went on to detail how this should occur: “The main responsible comrades of Party committees and governments at all levels communicate with the representatives of private enterprises … through seminars, informal discussions, and other means; communicate the relevant situations; focus on development problems; discuss solutions; and establish strong mechanisms for overseeing communication results and feedback.”

Moreover, in localities where the private economy occupies a relatively large share of the economy, “Party committees and governments should hold economic work conferences and conferences related to the development of the private economy” (CSIS, October 2020). Additional research from Anhui Province in 2012 detailed how officials and units from a Party “Nonstate Economic Organizations and Social Organizations Working Committee (非公有制经济与社会组织工作委员会)” would “meet regularly at working conferences to discuss cooperation on party-building initiatives in the private sector.” [2]

The approach, termed “Party building + Industry” (党建+产业) demonstrates the integration of the CCP with the private sector. Another associate approach, termed “Party building + Project item (党建+项目),” unifies party-building activities with concrete project items in a company. Measures such as “maintaining the guidance of ‘party building’ in project development and having Party members to participate in the development of project items (坚持以党建引领项目发展、让党员参与项目建设)” ensure that a company will develop in a way to serve and resonate with the Party’s interests (CCP WuXi Gov, April 18, 2023). According to Article 2 of the “Regulations on the Work of CCP leading groups (中国共产党党组工作条例),” Party groups, which are widely set up in private companies, serve as leadership bodies established by the Party within central and local state organs, people’s organizations, economic entities, cultural organizations, and other non-Party organizations. They play a leading role within their respective units and represent a crucial organizational form through which the Party exercises leadership over non-Party organizations (Xinhua, April 15, 2019).

Any company that operates in the conferences, funding mechanisms, industrial and research parks, and ties itself closely to national strategies, like the Military-Civil Fusion Development Strategy, warrants further scrutiny. Taken individually, such participation is simply the nature of doing business in the PRC. The accumulation of such indicators suggests that a private firm contributes to the CCP’s objectives as much as any state-owned enterprise and should be treated with similar care.

The Rise of WuXi AppTec: A Model of State-Supported Biotechnology Advancement

In Beijing’s eyes, WuXi AppTec is a critical vehicle for achieving the high-quality development and national rejuvenation it prizes. [3] It thus bears the hallmarks of the PRC’s industrial strategy, both in terms of the alignment of corporate and party objectives and the outcomes seen in WuXi AppTec’s rapid ascent.

WuXi AppTec, founded in 2000 in Wuxi City, Jiangsu Province, exemplifies the symbiotic relationship between China’s biotechnology enterprises and the CCP’s ambitions. WuXi AppTec managed to be listed on the New York Stock Exchange within just seven years, following remarkable growth—bolstered by targeted support from the Wuxi government, including tax incentives and land use advantages (WeiXin, March 8, 2023).

The company has deep connections with the CCP. By 2005, WuXi AppTec had already established a CCP organization within its structure in China, boasting 20 Party branches and embedding the Party’s presence within its corporate culture. By 2013, over 1,000 of its 7,000 employees were CCP members (Communist Party Member Web, May 25, 2013). According to WuXi AppTec’s CCP Party Group Vice Secretary Lin Wenbun (林文斌), the company’s culture promotes the notion that “Party members are the technical backbone (党员就是技术骨干)” of the organization. This is also reflected through the CEO and Chairman Li Ge (李革), who personally attended and supported internal CCP activities. Li demanded that Party branches and members should actively contribute to the company, and provided significant support for the company’s Party-building efforts, allocating a specific space for CCP activities in the company headquarters. These practices remain a core part of the organization’s functioning.

In 2022, You Tiangcheng (尤天成), party Secretary and director of the Tianjin Economic Development Area, visited WuXi AppTec’s Tianjin office to guide and inspect the company’s Party-building work among private enterprises. You commended the company for its comprehensive approach to talent management, emphasizing the integration of daily operations with Party-building activities. He highlighted the importance of cultivating Party members as key personnel and vice versa, aiming to achieve a “win-win” between Party work and business development. By advocating for the absorption of communist members into leadership and core groups, he sees the Party as a “red engine (红色引擎)” for the company’s growth (Wunyi, May 17, 2022).

The reciprocal relationship between the state and enterprises like WuXi AppTec was underscored in another meeting in 2022. Du Xiaogang (杜小刚), the Party Secretary of Wuxi City, engaged in a virtual meeting with Li Ge and China COO Zhang Chaofei (张朝晖) to strengthen collaboration. During this meeting, Du expressed gratitude for WuXi AppTec’s long-standing support and contributions to the development of the city’s biopharmaceutical industry. In return, Li clearly affirmed that the company’s successful development since its early days would not be possible without the local government’s support and thus would further contribute to the city (The Paper, August 31, 2022). Here, mutual support and collaboration are key to achieving both corporate success and regional development goals.

The Secretary of the WuXi Municipal Committee, Du Xiaogang, met with the Chairman and CEO of WuXi AppTec, Li Ge, and the COO and Executive Vice President of WuXi AppTec China, Zhang Zhaohui. (Source: The Paper, August 31, 2022)

In April 2023, WuXi AppTec, WuXi Biologics, and other local biotechnology companies participated in a significant contract signing ceremony for the “Party Building Joint Construction Agreement (党建共建协议书).” This event further formalized and deepened the construction of Party-building alliances within the biopharmaceutical industry. By inserting “Red genes (红色基因)” and embracing the principle of “joint construction, progress, sharing, and winning,” the municipal Party committee formed a Party-building alliance and established a cooperation mechanism focused on aligning the firms with the Party’s key goals and tasks (see China Media Project, May 18, 2021; CCP WuXi Gov, April 18, 2023).

A meeting report provides further insight into the workings of the Party group and Party-led model (described in the previous section). The report reveals that the Party Group of the Wuxi High-Tech Zone Science and Technology Innovation Promotion Center conducted a review and identified a lack of diversity in their investment channels as a significant issue. In response, the group visited WuXi AppTec and other companies to seek contributions, successfully raising RMB 2.5 billion ($350 million), which was then used to induce more companies to relocate to the zone (WND, October 27, 2021). In a separate instance, SOE China Life Healthcare Investment Company invested a total of RMB 15.5 billion ($2.18 billion) in WuXi AppTec and other biotechnology companies via the Party group’s financing mechanism. This was touted as contributing to the “Healthy China” initiative, a national-level policy goal (Communist Party Member Web, February 2, 2023).

WuXi AppTec’s Intersections with PLA and Military-Civil Fusion Initiatives

WuXi AppTec’s engagements reveal ties to the PLA and broader state-led initiatives, highlighting a complex relationship that blends civilian and military interests. Examples such as WuXi Biologics CEO Chen Zhisheng (陈智胜) delivering a joint lecture at Tsinghua University with Major General Chen Wei (陈薇) of the PLA’s Academy of Military Medical Sciences (AMMS) are just the tip of the iceberg (Tsinghua, January 1, 2019).

WuXi AppTec’s acknowledgment and awarding of PRC researchers from the PLA’s Academy of Military Medicine for their research contributions underscore a close connection to military-affiliated scientific endeavors. Significantly, the composition of WuXi AppTec’s management committee includes representatives from AMMS, the Fourth Military Medical University, CAS, and even a vice chairman of the National People’s Congress Standing Committee. This is suggestive of a deliberate fusion of military and civilian realms in the company’s research and development activities (WuXi AppTec, accessed February 8).

Joint lectures and awards indicate that cooperation and joint projects occur, even if they are not in themselves hard evidence of institutionalized military cooperation. At the very least, the mutual approbation and acknowledgment between the two groups indicate that the PLA and WuXi AppTec work in parallel to advance the CCP’s goals and are both considered to be key players in the same field. More substantively, as highlighted above, “seminars, informal discussions,” and other collaborative meetings are known to be the preferred modus operandi for engagement and coordination between Party organizations and private enterprises. Such connections are also further evidenced by WuXi AppTec’s involvement with the MCF development strategy.

WuXi AppTec’s receipt of investment from the “Aviation Industry Corporation of China Military-Civic Fusion Selected Hybrid Securities Investment Fund (中航军民融合精选混合型证券投资基金)” further cements its role within the MCF Development Strategy. This fund, explicitly set up to invest in enterprises engaged in military production, indicates WuXi AppTec’s involvement in the PLA’s broader ambitions to integrate military capabilities with civilian technological advancements (JRJ, September 3, 2019).

Since 2016, the company’s operation of one of 27 National Development and Reform Commission (NDRC)-designated “Genetic Testing Technology Application Demonstration Centers (基因检测应用示范中心),” alongside entities like the Xinjiang Production and Construction Corps—which faces US sanctions for human rights abuses—raises serious concerns about the use of genetic data collection utilizing practices that the international community views critically (Labtub, accessed February 8). This center came out of a June 2015 announcement from the NDRC, which was closely followed by the news that Wuxi City was going to build “Asia’s biggest genetic testing industrial base” (Yzymed.com, August 24, 2015). This would be led by an academic at the CAE.

Additionally, in 2016, as part of the “Major New Drug Creation Initiative (新药重大创制”科技重大专项)” under the Thirteenth Five-Year Plan, WuXi AppTec Deputy CEO Chen Shuhui (陈曙辉) was appointed to the core committee of the initiative alongside representatives from the Fourth Military Medical University (第四军医大学), the Military Medical Science Academy’s Institute of Pharmacology and Toxicology (军事医学科学院毒物药物研究所), and the CAS. The committee’s mandate was to foster a tightly integrated innovation system across all stages of drug development, combining government, industry, academia, and research efforts to produce innovative outcomes with significant clinical value (Phirda, November 25, 2016).

These examples collectively highlight WuXi AppTec’s multifaceted relationship with the PLA and related state endeavors, suggesting a blend of commercial, scientific, and potential military interests that merit deeper scrutiny within the context of global genomics research and its ethical implications. One facet of this includes how WuXi and its subsidiaries handle genomic data from individuals around the world.

Genomics at WuXi AppTec and Data Privacy Concerns

WuXi AppTec’s first significant involvement in sensitive genomics and genetic data analysis was through its former subsidiary WuXi NextCode (药明明码), created in 2015 through the acquisition of NextCode Health, a company in Iceland. In 2018, WuXi NextCode acquired the controversial Genomics Medicine Ireland (GMI). GMI had previously been accused of collecting hundreds of thousands of Irish DNA samples using problematic donation and consent mechanisms (Irish Times, September 7, 2023). WuXi NextCode also advocated for building an open cloud database to allow researchers worldwide to freely access extensive genomic information of patients and their families (Bioon, May 25, 2016). A segment of WuXi NextCode was restructured into Genuity Science—a separate entity—to avoid US regulatory action and criticism. Genuity Science was eventually purchased by US biotechnology firm HiberCell in an all-stock transaction worth $100 million (BizJournals, August 16, 2021). However, the approach taken by the WuXi conglomerate in viewing and managing genomics data requires more investigation.

WuXi AppTec states that its model is made from publicly available human genome sequences without involving human gene sequence analysis (The Paper, February 4, 2023). However, in 2016, China’s Ministry of Science and Technology concluded an investigation into WuXi AppTec in Suzhou for violating human genetic resources management regulations (MOST, October 21, 2016). The company was found to have improperly exported 5,165 human serum samples without authorization, falsely labeling them as canine plasma. To improve its ability to sequence DNA, in 2014, WuXi AppTec purchased an Illumina HiSeq X Ten Sequencing System. It was the world’s first platform to deliver full coverage of human genomes for $1,000, including DNA extraction, so it granted WuXi the most advanced gene sequencing capability at that time (Illumina, March 10, 2014). Hence, WuXi AppTec’s recent denials against researching human genomics should be treated skeptically.

WuXi ATU’s website shows that they provide cell bank manufacturing services. (Source: WuXi Advanced Therapies)

A Philadelphia-based subsidiary, WuXi Advanced Therapies (WuXi ATU) (药明生基), offers cell bank manufacturing services (WuXi Advanced Therapies, accessed February 8). This facility specializes in creating, characterizing, and releasing cell banks for use in biopharmaceutical products, and offers sequencing to characterize DNA inserts. Sequencing services involve analyzing the DNA of the cells they store in order to confirm the identity of the cell lines and check their integrity. The existence of a cell bank with such capabilities implies that the facility has access to, and can process, cell lines derived from human sources—among others—at any time. The latest WuXi Biologics research also indicates that they have adopted whole genome sequencing and next-generation sequencing from patients (AICHE, June 20, 2021; NCBI, December 19, 2022). To note, the WuXi conglomerate has not disclosed the origins of the cells stored in its cell bank, necessitating further investigations to determine if there is any unauthorized collection of cell samples. However, the evidence presented is adequate to show that WuXi has been actively engaged in the reading and interpretation of human genetic material, defying its claims.

WuXi AppTec’s previous collaborations are also cause for concerns over data privacy. In 2016, the company partnered with Huawei to develop a “Genome Cloud (明码云)” platform for freely computing, storing, sharing, and exchanging cloud data containing large-scale population genomics (大规模人群基因组) and biotechnology within the industry at a national level (Bioon, May 25, 2016). Such concerns are compounded by WuXi AppTec’s global reach, and its overlap with other PRC national strategies, including its investments in Ireland and Singapore, and its participation in the Belt and Road Initiative (BRI) (Xinhua, August 2, 2018; Caijing, December 24, 2019; ifeng, February 7, 2023; WuXi Gov, October 19, 2023).

In 2018, WuXi AppTec and China Electronics Data Service Co. (CECD) partnered to create CW Data Technologies (中电药明), a venture offering one-stop big data healthcare solutions to China based on the collection of hospital medical and prescription data (WuXi AppTec, October 22, 2018). This collaboration under the umbrella of China’s National Health Commission, raised concerns due to CECD’s ties with significant state-owned entities, including China Electronics Corp (中国电子) and the China State-owned Enterprise Structure Adjustment Fund (中国国有企业结构调整基金) (CWDATA, accessed February 8). Defense conglomerate Norinco (中国兵器工业集团) also held a stake in the venture (State Council, September 28, 2016). The involvement of firms linked to the Chinese military and security services—firms that also appear on the US Treasury Department’s Office of Foreign Assets Control list of Non-Specially Designated Nationals (SDN) Chinese Military-Industrial Complex Companies—indicates that developments coming out of China’s civilian healthcare technology sector may also have applications of interest to the PLA (OFAC, June 3, 2021). Firms whose technology aids the development of adversarial militaries pose risks to the United States and its allies and partners. This should attract further scrutiny to ensure that a nation’s data is not transferred across borders or is otherwise allowed to benefit the CCP.

Conclusion

WuXi AppTec is a model of embedding state ambition with corporate success, showcasing how biotechnology enterprises are playing a pivotal role in advancing the PRC’s strategic objectives. This model also shows the critical need for robust data privacy measures and transparent practices. As WuXi AppTec continues to expand its global footprint, its commitment to safeguarding sensitive information against misuse becomes paramount. However, its links to the Chinese state at the local and national level, as well as the PLA, suggest that the firm could put Party priorities over those of its customers around the world, including US citizens, if called upon to do so.

WuXi AppTec’s story is not just one of corporate achievement but a narrative that encapsulates the broader theme of how state ambitions can be realized through strategically aligned enterprises. The company’s journey reflects the potential of such alignments to foster innovation and growth, while also highlighting the inherent responsibilities and challenges in balancing global leadership in biotechnology with the imperatives of data security and ethical governance.

Notes:

[1] Barry Naughton, Siwen Xiao, and Yaosheng Xu. “The Trajectory of China’s Industrial Policies.” US Institute on Global Conflict and Cooperation, June 2023 [Working paper]. https://ucigcc.org/wp-content/uploads/2023/06/Naugton-et-al-working-paper-1-jun-2023.pdf

[2] Xiaojun Yan and Jie Huang. “Navigating Unknown Waters: The Chinese Communist Party’s New Presence in the Private Sector.” The China Review, Vol. 17, No. 2 (June 2017), 37–63.https://yanxiaojun.org/reference/publications/Navigating%20Unknown%20Waters.pdf

[3] For a description of these objectives, see, Daniel Tobin. “Testimony: How Xi Jinping’s New Era should have ended U.S. Debate on Beijing’s Ambitions”, Hearing on “A China Model? Beijing’s Promotion of Alternative Global Norms and Standards”, U.S.-China Economic and Security Review Commission, March 2020. https://www.uscc.gov/sites/default/files/testimonies/SFR%20for%20USCC%20TobinD%2020200313.pdf

Red Genes: Assessing WuXi AppTec’s Ties to the Party-Army-State in China

Publication: China Brief Volume: 24 Issue: 5

By: Sunny Cheung, Arran Hope, Peter Mattis