Prevent Adversaries, Especially China, from Using or Developing U.S. Biotechnology for Purposes that Undermine U.S. and Allied National Security

Only then can the U.S. government respond effectively to a biological incident, whether that means developing vaccines against the pathogen or shifting the manufacturing of other countermeasures into high gear. To attain this ability, the DOD should deploy a detection capability that is scalable and pathogen-agnostic, coordinating this effort across government agencies.

To complement these efforts, the U.S. government must use all the technology protection tools it has to block transactions that could harm U.S. national security, including through foreign direct investments (see recommendation 2.5c). At the same time, it must recognize that there is no one-size-fits-all approach.

Regulating at the frontier of technology is difficult, particularly in biotechnology, given the nascent nature of many of its subfields. The Administration must legislate outbound investment rules to ensure that U.S. capital does not contribute to Chinese biotechnology developments that could pose a national security risk. It must also adopt a flexible approach to biotechnology export controls and be willing to deploy them in areas where they could have a strategic effect, including on a country-wide basis, but also closely scrutinize their efficacy.

Congress must require outbound investment rules that ensure U.S. capital does not support Chinese development of certain biotechnologies that could pose a national security risk.

The U.S. government currently lacks a clear understanding of U.S. investments in the Chinese biotechnology sector and thus is in a poor position to make informed policy decisions in this area. Experts shared with the Commission that approximately 20 percent of transactions involving U.S. investment in China do not report financial values. This is a missed opportunity to limit flows of American capital into Chinese biotechnology companies in areas that pose strategic risks. Moreover, recipients of U.S. capital also reap intangible benefits such as access to talent networks, management support, markets, and additional financing, bolstering their ability to outcompete U.S. firms.

In Congress, various bills have sought to establish outbound investment notifications. If passed, the Outbound Investment Transparency Act of 2023 would require U.S. investors to notify the Department of Treasury (Treasury) of certain outbound U.S. investments in “covered sectors” (i.e., semiconductors, AI, quantum, hypersonics, satellite communications, and networked laser scanning systems with dual-use applications) to “countries of concern.”²²¹ Another bill, the Preventing Adversaries from Developing Critical Capabilities Act, would require the President to identify categories of technologies and products in “covered sectors” that may pose a threat to the national security of the United States.²²²

The executive branch has also tried to address this problem. In August 2023, the Biden Administration issued Executive Order 14105 on “Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern,” which directs the Treasury to establish a program to prohibit or require notification of certain types of outbound investments for three categories of national security technologies: semiconductors and microelectronics, quantum information technologies, and artificial intelligence.²²³

None of these efforts have included biotechnology, however. Congress should legislate outbound investments rules, including the mandatory notification of outbound U.S. investments in relevant categories of biotechnologies and products to countries of concern, and include biotechnology as a covered sector for mandatory notification. These requirements would ensure that U.S. capital does not support Chinese biotechnology development in areas that pose significant national security risks, including those that would create or exacerbate supply chain dependencies.

One year after enactment, the Secretary of the Treasury should provide a report to Congress that includes information collected from the mandatory notification requirement to inform potential future measures to screen and/or prohibit future outbound biotechnology investments.

Congress should direct the Department of Commerce (DOC) to consider country-wide export controls blocking the sale of specific, highly sophisticated U.S. biotechnology items to China that would pose a substantial risk to national security if used for military end-uses.

Export controls are an important tool for restricting the misuse of technologies. Controls on biotechnology-related items have largely been harmonized internationally through the Australia Group, an association of 42 like-minded countries focused on monitoring the global flow of goods and technologies related to chemical and biological weapons.

These controls work best when goods and technologies flow through a vulnerable chokepoint and when there is a window of time wherein restricting that chokepoint provides a strategic advantage to the United States and its allies and partners. These controls also work best when there is a small, well-defined group of countries and companies that can develop a technology and when they all agree not to provide that capability to countries that cannot develop it. But the current export control system relies heavily on case-by-case and actor-by-actor assessments that focus on end uses and end users of concern. This approach makes it extremely challenging to prevent the flow of sensitive items because state and non-state actors can obfuscate the intended end use or divert goods to end users of concern.²²⁴ Export controls are an essential part of the U.S. technology protection strategy, but they can be, and are being, circumvented.

The United States took a significant step in rethinking export controls in the current geopolitical environment with its October 2022 limits on the sale of certain semiconductor technology to China. Many of these controls were enacted on a country-wide basis, meaning it did not matter which particular entity within China was requesting the items. In light of the CCP’s MCF strategy, the Biden Administration updated these controls in October 2023 to also apply to any China-headquartered entity, no matter where in the world it is operating. These broadly applied but tightly scoped controls were designed to provide a window of time to slow China from militarizing semiconductor technology. And because chip production relies on access to extremely specialized equipment—produced only by a small number of allied countries—it is very difficult for China to indigenize. Because of this, the United States can still respond.

Biotechnology is very different. Much of its value resides in things that are not easily contained by export controls, such as human capital, biological data, intellectual property, and industrial processes. Aspects that are controllable, like specific equipment, will likely not give the United States as much time to respond as in the case of semiconductors. At the same time, the DOC needs to develop agile export controls to mitigate the threat of adversaries using emerging biotechnology to do harm. Therefore, the DOC will need to be not just more aggressive in employing export controls for emerging technologies like biotechnology but also nimbler in removing controls that are no longer effective. Going forward, the DOC should consider country-wide export controls that block the sale of specific, highly sophisticated U.S. biotechnology items to China.

To be effective, such controls should be:

• specific in the items they govern;
• able to give the United States and key partners the windows they need to secure advantages; and
• coordinated with promotion measures, such as enabling domestic firms to tap into the proposed Independence Investment Fund (see Section 2.2a), to ensure that domestic companies, particularly small- and medium-sized enterprises, can maintain viability while controls are in place.

Making country-wide export controls more agile will require a new type of relationship between the government and industry, especially with smaller enterprises. It will require the private sector to work proactively and in good faith with the government and share information about the leading edge of technology in order to assist with crafting meaningful controls. It will also require that the government ensure that the controls are in place only as long as they are strategically helpful.

Additionally, given the global nature of the biotechnology industry, allies and partners will need to consider the threat of China’s diversion and misuse of dual-use biotechnology equipment. They will need to implement controls in partnership with the United States, thereby collectively controlling equipment of concern on a country-wide basis.

Congress should require the Department of Defense (DOD) to incorporate military-relevant applications of emerging biotechnology into wargaming exercises.

Biotechnological advancements have the power to fundamentally alter the way future wars are fought and won, leaving the United States vulnerable to strategic surprise as adversaries’ use of biotechnology rapidly evolves. To ensure that the U.S. military remains ready for all eventualities, the DOD should ensure that wargaming exercises incorporate the effects of emerging biotechnologies.

U.S. Joint Staff wargaming efforts, such as the annual Globally Integrated Wargames, focus on testing multi-domain operations and explore how different military forces can be synchronized to counter emerging threats.²²⁵ Incorporating biotechnology into such wargames, the Joint Staff and combatant commands could simulate scenarios where, for example, biotechnology-enabled enhancements improved warfighter performance. Doing so would help the U.S. military better anticipate both the strategic challenges and opportunities posed by advancements in biotechnology and ensure that it is considered alongside other critical and emerging technologies such as cyber and AI when shaping military doctrine and operations.

By incorporating biotechnology into wargames, the military and DOD civilians could better understand how the latest biotechnological advances might influence tactics, logistics, and force structures, as well as how to counteract bio-based threats. This proactive approach would help the U.S. military stay ahead of adversaries in an era when biological innovations could play a central role in strategic operations, ensuring a more resilient and adaptive force.

These efforts should be undertaken in coordination with the Office of Global Competition Analysis (OGCA) (see recommendation 1.3a) to couple wargaming exercises with outside analysis and other available foresight tools.

Congress should resource the intelligence community (IC) to prioritize understanding adversaries’ development of biotechnology and its diverse applications.

Ensuring that the United States’ threat awareness keeps up with biotechnological advancements starts with equipping agencies at the front lines of evaluating these developments with the right tools and resources. In practice, that means making certain that Congressional oversight committees are informed on the IC’s evolving needs. Congress should require the Central Intelligence Agency (CIA), the Defense Intelligence Agency (DIA), the FBI, the National Security Agency (NSA), and the ODNI to periodically brief relevant Congressional committees about the resources they need to analyze potential threats from biotechnology. This brief would include a discussion of the tradeoffs that may occur if resources are diverted from competing priorities to address threats related to biotechnology. Already, Congress has undertaken some efforts on this front, including passing a provision in the 2025 NDAA requiring the IC to develop a strategy for countering the ways foreign adversaries use biotechnology.²²⁶ The Commission encourages the IC to develop and implement this strategy expediently.

Biotechnology Tech Hubs: Driving Economic Growth Across the Country

Technology hubs are a proven way to drive local economic development and forge partnerships across government, industry, and educational organizations. For example, the North Carolina Biotechnology Center has catalyzed investment for 40 years, growing a local industry that directly employs 75,000 people. Building on this model, the Department of Commerce (DOC) launched the Regional Technology and Innovation Hubs (Tech Hubs) program in 2023, authorized by the CHIPS and Science Act.ˡⁱⁱ Tech Hubs invest in American communities, funding programs that target critical technology areas. They aim to scale American technology and discoveries locally, build globally competitive manufacturing centers, and create well-paying jobs.
The Tech Hubs program is a recognition that local communities best understand what they need to grow. That is why Tech Hubs are public-private partnerships, bringing together academia, state and local governments, and private industry to most effectively use federal funding to discover, mature, and commercialize groundbreaking technologies.

The 31 Tech Hubs, representing communities across America, will lead a new era of technological innovation. 11 tech hubs focus on biotechnology, such as converting corn into chemicals, advancing biologics in medicine, and developing artificial intelligence (AI) applications for biotechnology.

In 2024, the DOC announced over $500 million in grants for Tech Hubs. Each Tech Hub provides funding ranging from $20-55 million for regional consortia to spend on infrastructure, workforce, and commercialization efforts. This initial funding jumpstarts regional growth while promoting an organization that reduces the need for continuous federal funding.

If the United States is going to capture the opportunities that biotechnology and biomanufacturing present, Tech Hubs across the country will lead the way. The future of biotechnology is local, but the impact will be global.