U.S.–China Biotech & Life Sciences Sector Analysis

Trump–Xi Beijing Summit  |  May 2026

One company, one blacklisting, one rescue mission — and the larger story of China rewriting global biomedicine

Prepared by Richstorm.co

Key Takeaways

▸  Illumina — the world's dominant DNA sequencing company with over 60% global market share — was the sole life sciences representative in Trump's Beijing delegation not to explore opportunity, but to undo a punishment: China blacklisted it after it lobbied Washington to restrict Chinese genomics competitor BGI, costing Illumina 27% of its China revenue in a single quarter.

▸  Big Pharma's absence from the delegation was the opposite story — Pfizer, Eli Lilly, and Merck were not there because they did not need to be. Over $50 billion in U.S.-China pharmaceutical licensing deals were signed in the first two months of 2026 alone, a business conducted entirely through commercial channels that requires no presidential summit to negotiate.

▸  China's 15th Five-Year Plan names biotechnology as a breakthrough priority for the first time in planning history — backed by a decade of systematic medical device self-sufficiency that has already turned China from a net importer to a net exporter of medical devices, with the same trajectory now targeting pharmaceuticals and genomics infrastructure.

▸  The deepest strategic risk for Western life sciences investors is not competition in any single drug category — it is China's deliberate build-out of genomic data infrastructure through BGI's National GeneBank, positioning Beijing to control a critical input to 21st-century precision medicine across Belt and Road partner countries and beyond.

Executive Summary

Of the seventeen business leaders who joined President Trump in Beijing in May 2026, one stands apart from the rest in a way that has gone largely underexamined: Jacob Thaysen, CEO of Illumina. He is the sole representative of the entire life sciences and biotechnology sector — an industry that employs millions, touches every human life, and sits at one of the sharpest edges of U.S.–China strategic competition.

His presence raises two questions that together illuminate one of the most consequential and underreported dimensions of the U.S.–China rivalry. First: why was a mid-size genomics company — not Pfizer, not Eli Lilly, not Merck — the only life sciences voice in the room? Second: why were the pharmaceutical giants conspicuously absent when China is their fastest-growing source of licensed drug candidates and contract manufacturing? The answers to both questions reveal a sector at war with itself — simultaneously racing toward China for its scientific innovation and being legislated away from China on national security grounds.

But the deeper story is China's own. The 15th Five-Year Plan, adopted in March 2026, names biotechnology and pharmaceutical innovation as explicit breakthrough priorities for the first time in any five-year planning document. China has spent a decade systematically dismantling its dependence on Western pharmaceuticals and medical devices. The transformation is further along than most Western observers appreciate — and it will reshape the global life sciences industry regardless of what any bilateral summit produces.

Part One: Illumina — A CEO on a Rescue Mission

Who Is Illumina, and Why Does It Matter?

Illumina is not a household name, but it is one of the most strategically significant companies in modern medicine. It holds more than 60% of the global market share in DNA sequencing technology — the machines that read the genetic code of living organisms, underpinning cancer diagnostics, rare disease research, prenatal testing, pathogen surveillance, and the drug discovery pipelines of virtually every major pharmaceutical company in the world. The global genomics revolution of the past two decades was, in large part, built on Illumina's instruments.

China was once a major market. At its peak, Illumina's China sales reached $500 million annually. By 2024, that figure had fallen to approximately $300 million — a decline driven primarily by the rise of BGI, China's homegrown genomics giant, which grew from being one of Illumina's largest customers in 2010 into its most formidable competitor by 2014. The story of Illumina in China is, in microcosm, the story of China's entire technological ascent: it bought the technology, learned from it, built its own version, and then systematically displaced the original supplier.

The Blacklisting: A Precisely Targeted Retaliation

In February 2025, China's Ministry of Commerce placed Illumina on its "Unreliable Entities List" — a designation that effectively blacklists the company from exporting gene sequencers to China and signals to Chinese customers that purchasing from Illumina carries regulatory risk. The timing was not coincidental: it came directly in response to the Trump administration's new 10% tariff on Chinese imports. But analysts noted that the targeting of Illumina specifically was far more strategic than a generic tit-for-tat.

The deeper cause traces back to the BIOSECURE Act — a piece of U.S. legislation aimed at restricting federal funding from flowing to biotechnology firms with ties to Chinese military interests, including BGI and its subsidiaries. Illumina had actively lobbied for the BIOSECURE Act's passage. In Beijing's calculation, Illumina was not merely a U.S. company caught in a trade war — it was a company that had tried to use the instruments of American legislative power to kneecap its Chinese rival. The Unreliable Entities List designation was China's answer: if Illumina wanted to hurt BGI in Washington, Beijing would hurt Illumina in Beijing.

The consequences were severe and immediate. Illumina's Q1 2026 China revenue fell 27% year over year. The company spent $80,000 per quarter lobbying the Office of the U.S. Trade Representative, attempting to navigate its way out of the blacklisting. Analysts warned that its China revenue would be challenged for the foreseeable future. Against this backdrop, Jacob Thaysen's trip to Beijing was not a market development visit. It was a diplomatic rescue mission — a CEO attempting to use the gravitational pull of a presidential summit to undo a government sanction that was actively destroying his company's second-largest market.

Illumina lobbied Washington to hurt BGI. Beijing retaliated by hurting Illumina. The CEO's presence in the Beijing delegation was not about exploring opportunity. It was about undoing a punishment — using the proximity of presidential diplomacy to achieve what corporate lobbying alone could not.

Illumina declined to confirm whether Thaysen met with Chinese officials during the trip or whether any progress was made toward removal from the Unreliable Entities List. The company said only that it was "not taking interviews or providing details" about the visit. The silence itself is telling: in diplomatic negotiations of this sensitivity, premature disclosure can undermine the outcome. The visit was the opening move in what will be a longer negotiation.

The BGI Mirror: What China Built While Illumina Dominated

The Illumina story cannot be understood without understanding BGI's rise — because BGI is not simply a competitor. It is the embodiment of China's strategic approach to life sciences: begin as a customer, learn the technology, receive state financing, build domestic capability, displace the foreign supplier, then go global.

BGI began in 1999, initially purchasing 128 Illumina sequencing machines — funded in part by a loan from the China Development Bank — and operating them at scale to sequence genomes at costs no Western laboratory could match. By 2013, it had acquired Complete Genomics, a U.S. sequencing company, giving it a foothold in American markets and access to manufacturing technology. Its subsidiary MGI then developed competing sequencing instruments from the ground up. Today, MGI's latest sequencing machine can sequence an entire human genome for approximately $100 — a figure that has fallen from $10,000 just a decade ago — and BGI's sequencing infrastructure is deployed across hospitals, research institutions, and national genomic databases in more than 100 countries.

The China Development Bank's loan that helped launch BGI's scale-up is not a historical footnote — it is the template. State financing, government procurement preferences, and mandatory localization targets created the market conditions for BGI to grow. Illumina lost China not primarily because BGI built a better product, but because the Chinese state systematically engineered the conditions for BGI's dominance.

Part Two: The Conspicuous Absence of Big Pharma

The Paradox of Absence

The pharmaceutical giants were not in Beijing because they did not need to be. This is not indifference to China — quite the opposite. Pfizer CEO Albert Bourla and Eli Lilly CEO David Ricks had both attended the China Development Forum in Beijing just two months earlier, in March 2026, meeting with Xi Jinping alongside more than forty other international business leaders. Big Pharma's relationship with China is so active and so commercially productive that it operates through channels entirely separate from presidential diplomacy.

As Trump's delegation was boarding Air Force One for Beijing, Bristol Myers Squibb was simultaneously unveiling a $15.2 billion partnership with China's Hengrui Pharma — a deal encompassing thirteen drug programs. That transaction, one of the largest in the history of U.S.–China pharmaceutical collaboration, required no state visit to negotiate. It was the product of years of scientific collaboration and commercial relationship-building conducted entirely outside the diplomatic arena.

The Licensing Revolution: China as Drug Innovator

The nature of Big Pharma's relationship with China has been fundamentally transformed over the past decade. For most of the 20th century and into the early 2000s, the flow of pharmaceutical innovation ran entirely in one direction: Western companies developed drugs, obtained patents, and sold them into the Chinese market. Chinese pharmaceutical companies made generic copies once patents expired.

China was a consumer of Western biomedical innovation, not a producer of it.

That model has been decisively reversed. By the first half of 2025, 32% of innovative drug out-licensing globally came from Chinese companies — up from single-digit percentages just a few years prior. In 2024, the combined value of China's out-licensing deals reached approximately $46 billion. A Stifel analysis showed that 30% of all licensing deals conducted by major global pharmaceutical companies now involve a Chinese biotech partner. As one industry analyst described it: China's innovative pharmaceutical sector has reached its "DeepSeek Moment" — the point at which the world is forced to reckon with a competitor that has gone from imitator to innovator.

The drivers of this transformation are structural. Drug development in China is dramatically cheaper and faster than in the United States. Regulatory reforms since 2015 cut the time to approve first-in-human clinical trials from 501 days to just 87.

China now accounts for more than 30% of the global pipeline of innovative drugs. Its companies are producing world-class innovations in antibody-drug conjugates, bispecific antibodies, cell and gene therapies, and GLP-1 receptor agonists — the drug class behind the global weight-loss medication revolution.

In September 2024, Chinese biotech Akeso's immunotherapy Ivonescimab outperformed Merck's blockbuster Keytruda — widely considered one of the most successful cancer drugs in history — in a Phase III trial for non-small cell lung cancer. The result sent shockwaves through the global oncology community. This is no longer a story about China making cheaper copies of Western drugs. It is a story about China producing drugs that Western companies cannot.

The BIOSECURE Complication

If Big Pharma's absence from the Beijing delegation reflects confidence rather than disengagement, it also reflects a political calculation. Trump signed the BIOSECURE Act into law in January 2026 as part of the National Defense Authorization Act for Fiscal Year 2026. The law restricts federal contracts and research funding from flowing to biotechnology firms tied to foreign adversaries — specifically targeting companies with links to the Chinese military, including WuXi AppTec, BGI, MGI, and Complete Genomics.

For Pfizer, Eli Lilly, and their peers, this creates a deeply uncomfortable position. WuXi AppTec — one of the targeted companies — helps produce the active ingredient in Zepbound and Mounjaro, Lilly's blockbuster weight-loss drugs. Pfizer has signed licensing deals with multiple Chinese biotech firms. Merck surpassed AstraZeneca as the largest multinational pharmaceutical company in China by sales, largely on the strength of its HPV vaccine Gardasil, generating $6.8 billion in China revenue in 2023.

Being visibly present at a Trump–Xi summit — sitting at the same table as the president who signed the BIOSECURE Act — while simultaneously navigating complex compliance obligations around Chinese manufacturing partners would have been diplomatically untenable. Big Pharma's absence was as much a calculation about Washington politics as it was about Beijing relationships.

Part Three: China's Grand Strategy — The 15th Five-Year Plan and Self-Sufficiency

Biotechnology as a National Priority — For the First Time

On March 13, 2026, China's National People's Congress adopted the 15th Five-Year Plan for National Economic and Social Development, covering 2026 to 2030. The plan represents the most explicit and detailed commitment to biomedical self-sufficiency in the history of China's planning documents — and it was not an accident of timing that it was adopted just two months before the Beijing summit.

For the first time in any five-year plan, biotechnology is named as one of eight frontier technologies targeted for breakthrough advancements. Three of those eight are directly tied to life sciences: life science and biotechnology, brain science, and pharmaceutical innovation. The Atlantic Council noted that this level of specificity on biotechnology priorities is unprecedented in Chinese planning history. Previous plans, including Made in China 2025, included vague targets for biotechnology that were never fully operationalized. The 15th Five-Year Plan is different — it names research and development priorities for each area and allocates dedicated budget and regulatory support.

The plan's healthcare dimension is equally ambitious. It places biomanufacturing as a clear national priority, targets strengthened capabilities across biological design, production, and application, and integrates healthcare with the plan's broader emphasis on reducing dependence on foreign technologies. China's 2026 national budget — the first under the new plan — reflects this directly, with increased spending on science and technology, support for enterprise-led R&D, and targeted funding for biomedicine. Healthcare infrastructure investment extends to county-level and primary care institutions, expanding the addressable market for both domestic and foreign healthcare products — but with explicit preference for domestic suppliers.

A Decade of Dismantling Import Dependency in Medical Devices

To understand where China is headed, it is essential to understand how far it has already traveled. For most of the 20th century, China's hospitals were furnished with Western medical equipment: GE Healthcare MRI machines, Siemens CT scanners, Philips ultrasound systems, Medtronic implants. High-end imaging, diagnostic equipment, and surgical robotics were almost entirely imported categories. The idea that China could domestically manufacture a 7-Tesla MRI machine — one of the most complex instruments in modern medicine — would have seemed implausible as recently as 2015.

Made in China 2025 changed that calculus deliberately and systematically. The plan designated medical technology as a strategic emerging industry with explicit domestic substitution targets: 70% domestic market share for basic medical equipment by 2020, and 70% for mid- and high-end devices by 2025. It backed these targets with an estimated $47 billion in state support through subsidies, tax incentives, and investment funds, and enforced them through "red procurement" policies that directed government hospital tenders toward domestic products meeting technical thresholds.

The results have been dramatic. China now manufactures over 90% of its low- and mid-tier medical devices domestically. In patient monitors, ultrasound systems, and CT scanners priced under $500,000, Chinese manufacturers command more than 80% of the domestic market. United Imaging's 7.0T MRI — protected by more than 1,800 patents — has been deployed in more than 40 Tier 1 Chinese hospitals, replacing Siemens units at 30% lower cost. Mindray, China's largest medical device company, holds 60% of the domestic ICU ventilator market and has expanded to supply 80% of ASEAN public hospitals with patient monitors. In 2024, China's medical device export value reached $48.75 billion — exceeding imports of $35.8 billion for the first time, a historic reversal that would have been unthinkable a decade ago.

The frontier that remains is high-end imaging, genetic testing, and surgical robotics — segments where imported products still hold more than 70% of the Chinese market. This is precisely where the 15th Five-Year Plan concentrates its biotechnology ambitions, and precisely where the Illumina story becomes a bellwether.

China spent a decade systematically dismantling its dependence on Western medical devices, starting from the bottom of the value chain and working upward. The 15th Five-Year Plan signals that biotechnology and pharmaceuticals — the most knowledge-intensive, patent-protected, and historically Western-dominated sectors of all — are next.

The Pharmaceutical Self-Sufficiency Drive

The pharmaceutical transformation mirrors the medical device story but operates at an even deeper level of scientific complexity. For decades, China's pharmaceutical industry was dominated by traditional medicines, imported drugs, and cheap generic versions of Western drugs made with imported active pharmaceutical ingredients. The drugs that defined global medicine — cancer immunotherapies, biologic treatments, advanced cardiovascular therapies — were developed in the United States, Europe, and Japan, then sold into China at substantial margins.

That dependency is being systematically dismantled through a combination of state investment, regulatory harmonization, and talent repatriation. China's regulatory reforms since 2015 — modeled on FDA and EMA standards — made it possible for clinical trial data generated in China to support regulatory filings globally, transforming China into both a drug development hub and an export platform. The government explicitly prioritized new chemical drugs, antibodies, antibody-drug conjugates, protein and polypeptide drugs, vaccines, personalized medicines, pluripotent stem cells, and medical devices in its Made in China 2025 plan.

The pipeline results are extraordinary. China now contributes over 30% of the global pipeline of innovative drugs — a share that was in the low single digits just ten years ago. Chinese companies hold 23 active development programs for biosimilars of Novo Nordisk's Ozempic (semaglutide) alone. In CAR-T cell therapies — among the most advanced and expensive cancer treatments in existence — China is already a global leader by number of therapies under development or in clinical trials. Landmark investments from Western pharmaceutical giants — AstraZeneca's $2.5 billion Beijing R&D base, Pfizer's $1 billion "China 2030" R&D plan, Roche's $300 million high-tech manufacturing facility — are simultaneously accelerating Chinese scientific capabilities and creating dependencies that make these companies reluctant to decouple.

The Genomics Chokehold: China's Most Strategic Play

Of all the dimensions of China's biomedical self-sufficiency drive, the genomics sector is the most strategically significant — and the most underappreciated outside specialist circles. Genomic data is the raw material of precision medicine. The ability to sequence, store, and analyze DNA at scale is the foundation upon which the next generation of cancer therapies, rare disease treatments, and predictive diagnostics will be built. Whoever controls the world's genomic infrastructure controls a critical input to 21st-century medicine.

BGI's National GeneBank — a state-supported repository of genomic data from across China and increasingly from Belt and Road partner countries — is already one of the largest collections of human genetic information in the world. BGI has advanced genomic technology and operational standards through collaborations in Singapore, Thailand, Indonesia, and dozens of other countries, building an international genomics infrastructure that is simultaneously scientific, commercial, and geopolitical. When a Thai genomics center partners with BGI for cancer research, it is also deepening its dependence on Chinese sequencing technology, Chinese data standards, and Chinese analytical platforms.

This is precisely why Illumina's blacklisting matters beyond the immediate commercial damage to one company. Illumina's sequencing instruments were the global standard. Their displacement — first in China, potentially in Belt and Road partner countries — by BGI instruments represents a shift in who controls the infrastructure of global genomics. The BIOSECURE Act was Washington's attempt to slow this displacement in the United States. The Unreliable Entities List designation was Beijing's counter-move. Jacob Thaysen's presence in Beijing was the opening of what will be a protracted negotiation about the future of this infrastructure.

Part Four: Implications and the Road Ahead

For the United States

The United States faces a genuine strategic challenge in life sciences that the Beijing summit barely scratched the surface of. The BIOSECURE Act closes off some pathways through which U.S. federal funding flows to Chinese-linked biotech firms, but it leaves entirely unaddressed the far larger flow of private capital, intellectual property, and early-stage clinical advantages moving from U.S. companies to Chinese biotech partners through licensing deals. More than 30% of all licensing deals conducted by major global pharmaceutical companies now involve a Chinese biotech partner — and none of those transactions are subject to CFIUS review or BIOSECURE restrictions unless federal funding is involved.

The House Appropriations Committee's draft spending bill — released as Trump was heading to Beijing — proposed barring the FDA from accepting clinical trial data generated in China in drug applications, explicitly comparing the practice to "transferring know-how to our adversary." If enacted, this would effectively sever the mechanism through which Chinese biotech innovation reaches U.S. regulatory approval, potentially accelerating a bifurcation of global pharmaceutical development into separate U.S. and Chinese ecosystems.

Meanwhile, China's 15th Five-Year Plan is concentrating exactly the kinds of state investment and regulatory support that the United States is not providing for its own biotech sector. Pfizer's CEO has noted that U.S. biotech needs government support to match China's gains — a recognition that the current policy response, which focuses primarily on restriction rather than investment, may not be sufficient to preserve American leadership in the sector that will define 21st-century medicine.

For China

China's biomedical ambitions face real constraints that its Five-Year Plan does not fully resolve. Basic scientific research — the fundamental discoveries that underpin genuinely novel drug mechanisms — remains a relative weakness. China's biotech companies have excelled at translational efficiency: taking known mechanisms and turning them into clinical-stage drugs faster and more cheaply than their Western counterparts. But the most important drug innovations — the discovery of entirely new therapeutic targets — still disproportionately originate in Western academic and commercial research environments.

Domestic pricing pressure is another structural challenge. China's national volume-based procurement system — which centralized hospital purchasing across entire provinces to drive down prices — has dramatically reduced the profitability of selling drugs in China, even for domestic companies. Chinese biotechs increasingly depend on out-licensing deals with Western pharmaceutical companies not just as a strategic choice but as a financial necessity, using license fees as an alternative source of capital when domestic equity markets are constrained.

The BIOSECURE Act and growing Western scrutiny of Chinese biotech partnerships also risk cutting Chinese pharmaceutical companies out of the global ecosystems they need for commercialization. Chinese biotechs can develop world-class drugs at low cost — but bringing those drugs to global markets requires FDA approval, EMA approval, commercial partnerships with Western distributors, and access to Western healthcare reimbursement systems. If Western governments restrict those pathways, they do not eliminate China's biomedical innovation — they merely contain its global reach, potentially forcing it into parallel ecosystems serving Belt and Road partner countries and the Global South.

The Summit's Biotech Outcome

The Beijing summit produced no formal life sciences agreements — no regulatory harmonization framework, no BIOSECURE Act modification, no restoration of Illumina's access to Chinese markets. Whether Thaysen's visit produced any private diplomatic progress on the Unreliable Entities List designation remains undisclosed.

What the summit did produce, for the biotech sector, is the same thing it produced for every other sector: a reset of the diplomatic temperature that makes continued engagement more possible. The simultaneous announcement of a $15.2 billion BMS–Hengrui deal — signed as Air Force One was taking off — illustrated that the commercial relationship between U.S. and Chinese life sciences companies is too deeply intertwined and too mutually valuable to be governed primarily by state visits and summit communiques. It will continue to evolve deal by deal, lab by lab, clinical trial by clinical trial, largely below the level of diplomatic visibility.

The harder question — whether the United States and China can manage the strategic competition in genomics, AI-driven drug discovery, and biomanufacturing without the sector fracturing into two parallel global ecosystems — will not be answered by any single summit. It will be answered over the coming decade, shaped by the choices both governments make about investment, regulation, and the terms on which they are willing to remain scientifically connected to each other.

Conclusion

Illumina's Jacob Thaysen was the only life sciences executive in Beijing not because the sector is unimportant to U.S.–China relations, but because it is almost too important — too contested, too strategically charged, too entangled in both commercial interdependence and national security anxieties — for most companies to navigate comfortably in a high-profile diplomatic setting.

His presence told one specific story: a company that lost its Chinese market through a combination of competitive displacement and geopolitical retaliation, attempting to use presidential proximity to recover what corporate strategy and Washington lobbying could not restore. Big Pharma's absence told the opposite story: companies so deeply and profitably embedded in China's biomedical ecosystem that they do not need a summit to maintain their relationships — only the quiet, sustained, deal-by-deal engagement that has made the U.S.–China pharmaceutical partnership one of the most consequential in the history of medicine.

Behind both stories is China's larger ambition, now codified in the 15th Five-Year Plan: to transform from the world's largest consumer of Western biomedical innovation into one of its primary producers. That transformation is already well underway in medical devices, advancing rapidly in pharmaceuticals, and taking its most strategic form in genomics. How quickly, at what cost to Western industry, and whether the global life sciences ecosystem remains integrated or splits into rival technological spheres will define the sector for the next generation — and no summit in Beijing has yet begun to answer it.

RichStorm publishes independent science-driven investment analysis — pharma pipelines, AI infrastructure, supply chain risks, and long-term value creation. Subscribe free to stay ahead. [Subscribe here]

Report prepared based on reporting from GenomeWeb, Fierce Pharma, BioPharma Dive, the Atlantic Council, Ropes & Gray LLP, the U.S.-China Economic and Security Review Commission, CKGSB Knowledge, Carnegie Endowment for International Peace, MedTech Dive, and the U.S. Congress Research Service  |  May 2026