Chinese biotech firms led by WuXi Biologics sink in Hong Kong as proposed US bill cites complicity with PLA

Chinese biotechnology companies slumped in Hong Kong by the most in nearly two years, after a US lawmaker proposed a bill to block them doing business with the US government, citing their alleged complicity with the military. WuXi Biologics crashed by nearly a fifth, leading the plunge.

The Chinese biotech industry had remained largely unscathed, until the latest provocation. It is further evidence that Washington’s “small yard and high fence” strategy is getting tighter, not easier, despite the summit involving presidents Xi Jinping and Joe Biden in California last November.

The Hang Seng Index slid 1.6 per cent on Friday, ending a three-day rally and trimming the market’s first weekly advance in 2024. The Hang Seng HK-Listed Biotech Index, which tracks 50 of the largest companies in the biotech, pharmaceuticals and medical devices industries, tumbled 6 per cent, the biggest drop since March 2022.

WuXi Biologics sank 18 per cent to HK$24.55, the biggest drop since December 4, to erase HK$24.4 billion (US$3.1 billion) from its market value. Wuxi Apptec, a sister company that only became a Hang Seng Index member last month, also plunged 18 per cent, to HK$63.70.