Chinese biopharma stocks slump after Biden targets sector with executive order, opens new front in tensions with Beijing

US should not ‘artificially’ hamper global technology communication and trade, Chinese foreign ministry says

Executive order ‘a sign of an all-out confrontation between China and the US’: Shanghai analyst

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US President Joe Biden speaks to reporters at Andrews Air Force Base in Maryland on September 12. Photo: AFP

Published: 6:30pm, 13 Sep 2022Updated: 6:50pm, 13 Sep 2022

Chinese biopharmaceutical stocks slumped on Tuesday after US President Joe Biden signed an executive order overnight bolstering the US bio-manufacturing industry. The move is being seen as designed to curb America’s reliance on China for new medicine production.

Wuxi Biologics, the Jiangsu province-based contracted drug maker that counts on North America for half of its sales, tumbled by the most in seven months in Hong Kong on Tuesday. Its shares slumped 20 per cent to HK$53.40 for their biggest decline since February 8. Wuxi AppTec, an affiliate, plunged by 17 per cent to HK$68.75 in the city, while its onshore stock sank by the 10 per cent daily limit to 76.35 yuan in Shanghai.

The US should by no means “artificially” hamper global technology communication and trade, Mao Ning, a spokeswoman for the Chinese foreign ministry, said at a briefing in Beijing on Tuesday. China also urged the US to respect the market-based economy and the principle of fair play, with globalisation already being an objective fact, she said.

“[The executive order] will have a huge negative impact on Wuxi Biologics and the CRO [contract research organisation] industry,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “China will probably lose some of its CRO market share, given most of the industry companies have about half of their revenue coming from overseas.

“That is also a sign of an all-out confrontation between China and the US.”