{"slug": "treasury-proposes-adding-biotech-to-china-investment-restrictions-under-coins", "title": "Treasury proposes adding biotech to China investment restrictions under COINS Act", "summary": "The Treasury Department on October 22 proposed adding biotechnology to the COINS Act, the outbound investment screening law that already covers U.S. money flowing into Chinese semiconductors, artificial intelligence, quantum computing and high-performance computing, opening a 45-day comment period that closes December 7. The draft rule would bar U.S. companies and investors from equity deals, convertible debt, joint ventures, greenfield investments and limited-partner commitments involving Chinese biotech firms and their lab and production equipment suppliers, while explicitly carving out straight licensing agreements, according to Fierce Biotech. Treasury Secretary Scott Bessent used for the first time the sector-designation power Congress granted him on December 18, 2025, when it renamed the regime the COINS Act in the fiscal year 2026 National Defense Authorization Act; the underlying AI and chip restrictions trace to an August 2023 executive order signed by Joe Biden and took effect January 2, 2025, with a $50,000 de minimis threshold.", "body_md": "*Treasury wants to block equity deals with Chinese biotech firms while leaving pharma licensing alone, and the comment window is already running.*\n\nOn October 22, the Treasury Department proposed folding biotechnology into the Comprehensive Outbound Investment National Security Act, the law that already screens American money flowing into Chinese semiconductors, artificial intelligence, quantum computing and high-performance computing. Bloomberg reports the draft rule would prohibit U.S. companies and investors from entering equity deals, convertible debt arrangements, joint ventures, greenfield investments or limited-partner commitments involving Chinese biotech companies and the manufacturers that supply them with lab and production equipment. Treasury opened a 45-day public comment period, with responses due December 7.\n\nThe AI and chip provisions here are not new. They trace back to an executive order Joe Biden signed in August 2023, which Treasury turned into a final rule that took effect January 2, 2025. That rule already carries the $50,000 de minimis threshold the brief flagged: a figure designed to catch third-country vehicles, so a fund domiciled in Singapore or the Cayman Islands can't dodge the rule just because it isn't itself Chinese-controlled. Congress wrote the whole regime into statute on December 18, 2025, as part of the fiscal year 2026 National Defense Authorization Act. It renamed the law the COINS Act and handed Treasury Secretary Scott Bessent the power to add new sectors by designation. Biotech is the first sector he's used that power on.\n\nWhat actually changed this week is the scope, not the mechanism. Biotechnology was conspicuously left out of the original COINS Act text, and for months that omission was a live fight in Washington. Representative John Moolenaar, who chairs the House's select committee on China, and Representative Debbie Dingell sent Bessent a letter in May pushing to designate biotech a prohibited sector outright. Pfizer and other large drugmakers took the opposite position, meeting with administration officials to argue that broad restrictions would cut off access to Chinese-originated drug candidates at a moment when licensing deals with Chinese biotechs have become central to refilling American pipelines. Treasury's proposal splits the difference: it restricts the capital relationships, financial stakes, joint ventures, the deals that hand over governance rights or ownership, while explicitly carving out straight licensing agreements, according to a report from Fierce Biotech. A pharma company can still pay a Chinese biotech for the rights to a molecule. It just can't take an equity position in the company that developed it.\n\nThat line matters because of how dependent the industry has become on China as a source of early-stage science. Chinese biotechs have become such a fixture in big pharma's licensing pipeline that groups like the American Economic Liberties Project have argued, in an op-ed Stat ran in May, that U.S. drugmakers are trading long-term domestic biotech strength for short-term pipeline fixes. Treasury's proposal doesn't touch that trade. It touches the ownership stakes, the joint research ventures, and the limited-partner checks that would otherwise let American capital help build out Chinese biotech manufacturing and R&D infrastructure directly.\n\n[US and China extend their rare earth truce by just two months to January](https://startupfortune.com/us-and-china-extend-their-rare-earth-truce-by-just-two-months-to-january/)\n\nScott Bessent announced the extension September 23 as Xi Jinping visited Washington, but China is still short on $17 billion in promised farm purchases and rare earth shipments haven't returned to agreed levels. - [us china rare earth export controls extension](https://startupfortune.com/us-and-china-extend-their-rare-earth-truce-by-just-two-months-to-january/) - [chipmakers struggle with rare earth supply delays](https://startupfortune.com/us-and-china-extend-their-rare-earth-truce-by-just-two-months-to-january/)\n\nHere's the part that should worry seed-stage investors more than headline M&A numbers: the $50,000 threshold was never a floor built for Series C rounds. It exists to catch small, indirect exposure: the angel check routed through a fund-of-funds, the chip design IP license, the cloud compute arrangement with a Chinese AI lab. These are structures investors assumed were too small or too indirect to trip a federal filing requirement. The AI and semiconductor sectors have lived under this threshold since January 2025. Any fund or LP with China-adjacent AI exposure already needed to have mapped its cap table against this regime well before this week's news. That's the deal. Treasury has signalled it intends to keep expanding this list - biotech is simply the sector that happened to go first.\n\nThe COINS Act also widened the map of countries this applies to. The original 2023 executive order named only China, Hong Kong and Macau as countries of concern. Congress added four more in December: Russia, Iran, North Korea, Cuba and Venezuela. The enforcement infrastructure and designated technology sectors for those additions still have to be built out through further rulemaking, due by March 2027 under the statute's own timeline.\n\nTreasury has been more cautious on biotech than the hawks in Congress wanted. Two people familiar with the matter told Fierce Biotech the department resisted fully folding pharmaceuticals in while it finished the AI and semiconductor rules, and the licensing carve-out in this draft reflects that caution rather than a clean win for either side. Moolenaar and Dingell's separate Biotech Investment National Security Act, introduced in June, would go considerably further, reaching into biologics manufacturing and clinical R&D directly. That bill hasn't moved. For now, the fight over how far outbound investment law should reach into biotech is happening in a 45-day comment window, not on the House floor, and Pfizer's lobbyists know it.\n\n**Also read:** [Big banks start blocking AI agents from logging into customer accounts](https://startupfortune.com/big-banks-start-blocking-ai-agents-from-logging-into-customer-accounts/) • [SK Hynix withdraws Solidigm's planned US IPO after Korean regulators object](https://startupfortune.com/sk-hynix-withdraws-solidigms-planned-us-ipo-after-korean-regulators-object/) • [HSBC turns its PayMe app into a stablecoin wallet for 3.3 million users](https://startupfortune.com/hsbc-turns-its-payme-app-into-a-stablecoin-wallet-for-33-million-users/)\n\n*This article is posted in [Financial Markets News](https://startupfortune.com/category/financial-markets/), check it out for more related stories.*\n\n## Join the discussion\n\n[Open in the community →](https://startupfortune.com/community/)\n\nAlmost there. Sign in and your reply posts straight away.", "url": "https://wpnews.pro/news/treasury-proposes-adding-biotech-to-china-investment-restrictions-under-coins", "canonical_source": "https://startupfortune.com/treasury-proposes-adding-biotech-to-china-investment-restrictions-under-coins-act/", "published_at": "2026-10-23 17:03:52+00:00", "updated_at": "2026-10-23 17:16:02.895904+00:00", "lang": "en", "topics": ["ai-policy"], "entities": ["Treasury Department", "Scott Bessent", "COINS Act", "John Moolenaar", "Debbie Dingell", "Pfizer", "Joe Biden", "Fierce Biotech"], "also_reported_by": [], "alternates": {"html": "https://wpnews.pro/news/treasury-proposes-adding-biotech-to-china-investment-restrictions-under-coins", "markdown": "https://wpnews.pro/news/treasury-proposes-adding-biotech-to-china-investment-restrictions-under-coins.md", "text": "https://wpnews.pro/news/treasury-proposes-adding-biotech-to-china-investment-restrictions-under-coins.txt", "jsonld": "https://wpnews.pro/news/treasury-proposes-adding-biotech-to-china-investment-restrictions-under-coins.jsonld"}}