Chinese Biotech Initiative May Open Doors For U.S. Firms

Movement toward developing a robust, internationally active biotechnology industry is gaming momentum in the People’s Republic of China.. And as the movement picks up steam, one byproduct is an increasing number of stimulating opportunities for scientists and entrepreneurs connected with biotech firms outside of China. In an interview with The Scientist, Liu Yonghui, director of the National Center for Biotechnology Development in Beijing, said that his country wishes to “improve the quality of animals and plants through the creation of new varieties; to make new medicines and vaccines; and to build select areas of fundamental research, such as studies of protein structure and function.” The products of such collaborations will be “mainly for [use in] China,” he says, adding that eventually, a thriving biotechnology industry could build export trade. As biotechnology gains familiarity and acceptance within China, observes Ezra Weisman, vice president for corporate development at New Brunswick Scientific, sales opportunities for U.S. firms are bound to gain. “Chinese interest in biotechnology opens an enormous market,” says Weisman, whose Edison, N.J.-based company recently began selling its wares—scientific instruments—in China. As the Chinese biotech industry matures, and moves to gain a foot-hold in the international arena, other factors besides sales opportunities are apt to attract U.S. biotech involvement, say observers. China’s abundant raw materials and inexpensive labor force, for example, have long titillated the imaginations of Western and Japanese biotech industry executives and academic researchers. And as China accelerates efforts to make international scientific contacts, the Chinese may move with increasing assertiveness in forging joint ventures with industrial scientists in the US., Europe, and Japan. During the last year, for that matter, a group of top Chinese scientists has been traveling around the world—under the auspices of the Chinese State Commission of Science—calling on private industry in developed countries to discuss collaboration. The Chinese have good reason for seeking cooperation, says New Brunswick Scientific’s Weisman. “They know what is going on [in the biotechnology industry] and they have high goals and intellec- tual strength,” he says. “But in the area of facilities and equipment, they are decades behind.” Roger Beachy of Washington University in St. Louis, a specialist in plant molecular biology and agricultural biotechnology, adds that China has a vast stock of novel biological materials, especially plants, ready for development. “The Chinese are very proud of their folk medicine and ethnobotanical heritage, and can use that to produce novel pharmaceuticals. They could make a business of that,” he says. Of more immediate importance, Beachy says, “China will be a major force in food production in 10 years. But to accomplish this, China must first build its scientific infrastructure, which was decimated during the Cultural Revolution of 1966 to 1976, when its universities were closed, foreign-trained scientists were vilified, and foreigners in general were shunned. To rebuild, Chinese scientists have been undertaking two distinct but complementary tasks: They are moving to create well-equipped, modern laboratories and factories; and they are making strong bids to recruit and train the professionals needed. As for the first task, the development of biotechnology has been stymied by the lack of key materials and equipment. So some of China’s first approaches to Western companies have been to makers of scientific equipment. “Our initial goal was to start joint programs,” explains Gu Xiao Cheng, professor and chair of the biology department of Beijing University. “But to sustain that [effort] at the desired scale and speed, we have to buy a lot of things abroad, especially chemical reagents, and we don’t have foreign currency.” To get around that problem, Gu says, “We are seeking ventures with companies that allow money to go both ways.” A venture of that sort began to take shape a few weeks ago when officials from New Brunswick Scientific met with Gu and her colleagues to arrange for Chinese workers to make metal parts used in one of the U.S. company’s shakers. The foreign currency gained by the Chinese from such manufacturing can, of course, be reinvested in the purchase of technical equipment. “This kind of venture is ideal,” says Gu. A similar collaboration has been arranged with New England Bio-Labs in Beverly, Mass. The company manufactures endonucleases, the expensive enzymes that are the scissors and paste of modern molecular biology. “Before biotechnol- ogy can begin, you need these enzymes,” says Donald Comb, NEB president. American scientists can easily order these enzymes from catalogs, he notes, but the Chinese cannot. However, NEB is sponsoring contract research at the Chinese Academy of Medical Sciences, Beijing, and Fudan University, Shanghai, seeking new endonucleases in materials native to China that would be easier to produce there than enzymes requiring imported raw materials. Also, the in -vestigators hope that China’s novel biological raw materials will yield novel endonucleases. Monsanto Co. in St. Louis, Mo., is also supporting Chinese research. The company is about two years into an agreement to fund basic and applied research in soybean and wheat genetics, and the use of porcine somatotropin to stimulate the growth of lean pigs. “This is an experiment in developing relationships with China,” says Howard Jaworski, director of biological sciences at Monsanto. “In the long run, we would like to help their agriculture and of course we are interested in selling some products, such as herbicides and feed additives.” If these collaborations are successful and the Chinese develop easy access to laboratory equipment and biotechnology supplies, the country still must accomplish a second task: Highly trained personnel will be needed to staff and run these ventures. And the supply of scientific personnel has become an international issue as students go to the U.S. and other developed countries to study and become the objects of subtle bidding wars as the developed countries try to keep the best ones. Beginning in the early 1980s, China sent some of its most accomplished students to get doctoral training in the U.S. and Europe. Now, these students are graduating and making career plans. Many are ambivalent about returning home, expressing alternating bitterness and optimism. They have fierce loyalty to family and country; yet some fear for their personal safety, knowing well that not long ago Chinese with foreign ties were severely persecuted. The older students have especisily vivid memories of the Cultural Revolution. Other students are concerned about the lack of professional opportunities in China. They remember poorly equipped labs and a strict, hierarchical, academic structure, where original thinking was not always encouraged. Now the country has begun to court its own students, a remarkable change of strategy for a society where filial loyalty and responsibility to a particular institution have been taken for granted. For example, under the new policy, the Chinese Ministry of Education helped to support a symposium on biochemistry and molecular biology in New York City, in March 1987. It was attended by 130 Chinese students and postdocs working in the West. Most of the students were the only Chinese members of their graduate departments, and the conference provided a rare opportunity to build camaraderie. The ministry also paid the airfare for about a dozen of the Chinese students based in the U.S. to visit China and attend the International Biochemical Congress, held in Beijing during the summer of 1987. This expensive gesture offered the students a chance to see the progress in facilities made since they left and to witness China’s growing ties with the international biotechnology community. The same ministry also created special “postdoc stations” that give returning students the opportunity to continue their research under ideal conditions, and to counter any memories they may have of the primitive labs they had left when they went abroad to study. Those students selected for the temporary positions enjoy higher than average wages and living standards. For the first time, the Chinese are also. actively sweetening job offers to returning students instead of just assuming that they will return to their home institution regardless of the conditions. For ex- ample, last year Beijing University wooed Chinese born U.S. trained Chen Zhang Liang a top student at Washington University who could have found a permanent position in the U.S. Beijing offered Chen exceptional financial support for research and facilities, however, and he accepted in July 1987. “The facilities are very good,” says Beachy, Chen’s Ph.D. supervisor. “He has really nice equipment, lots of students, and freedom to travel.” Chen is trying to genetically engineer resistance to viral diseases into plants, especially rice. “The Chinese government is aware of recruiting problems," says Cornell University biochemist Ray Wu. “But there are limits on what can be done and the rate at which it can be done. Efforts made in the next few years can make an important difference.” The future of biotechnology in China rests, in large part, Wu says, “on the number of Chinese students who retum home in the next three to five years.” Anne S. Moffat a freelance writer in. Ithaca, NY, visited China in 1981 and 1986.

Chinese Biotech Initiative May Open Doors For U.S. Firms

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Anne Moffat

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October 1988

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