Treasury Proposes Rule That Could Restrict US Investment in Chinese Biotech

According to AP, the proposal was issued on October 22, 2026. It adds biotechnology to the sectors covered by outbound investment restrictions, alongside hypersonics, supercomputing and AI. The restrictions apply to China and other countries of concern.

The rule would let the government ban some US investments in those sectors. In other cases, it would require investors to notify the government first. According to AP, it carries out the COINS Act, which passed as part of the FY2026 defense authorization.

Early reports differ on how far the biotech limits go. Endpoints reports the draft would sharply limit US deals for Chinese drug and biotech assets. An earlier report from AllSci said Treasury was weighing a lighter approach that would protect pharma licensing deals.

For companies that source pipeline assets from China, that gap matters. A broad rule could affect licensing, equity stakes and deal structures. A narrow one could leave licensing largely as it is. The exact scope will depend on the text published in the Federal Register.

A separate bipartisan bill, known as BINSA, adds a second source of uncertainty. According to AP, it would require national security review of pharma licensing deals, joint ventures and equity investments involving Chinese entities.

Endpoints reports a 45-day public comment period. Nothing is final until a final rule sets an effective date.

What to watch next

The Federal Register text and its definition of covered biotech activity, any comments from the pharma industry, and whether BINSA advances.

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