Preventing China from using our own technology against us is a national security imperative. That’s why Congress enacted legislation like the Comprehensive Outbound Investment National Security Act of 2025 (the COINS Act). The bill is designed to prohibit U.S. individuals from participating in transactions involving countries of concern if those deals could jeopardize our own national security.
The intent of these outbound investment restrictions is important. Namely, the legislation seeks to ensure that U.S. money or technology that is transferred as part of regular business deals is not eventually used against America. The government must also strike an important balance in implementing these rules to ensure they are not so onerous as to harm America’s leadership in the global economy. Finding that middle ground in the highly-integrated global biotech marketplace in particular is a difficult challenge that America must meet.
Outbound Investment Rules Must Maintain America’s Global Dominance
Maintaining America’s economic lead in cutting-edge industries is a national security priority. Whether it is super intelligence (SI), computing, energy, biotech medicine, or robotics, America must continue to be the global leader in research and economic output. Losing our industrial edge in these next-generation fields would be a huge blow to American national security.
Accordingly, outbound rules need to be very targeted. Overly broad rules could have negative impacts on the ability of U.S. companies to compete overseas. That would result in the United States falling behind in the development of cutting-edge technologies, and being surpassed by foreign competitors can actually undermine American national security. The Department of Treasury specifically recognized this fact in its COINS Act rulemaking:
“The Treasury Department recognizes that restrictions may potentially have countervailing effects on national security to the extent restrictions lead to significant public health risks or harm U.S. businesses in this sector.”
American companies in biotech and medicines operate in a global marketplace. This is due to the fact that the U.S. currently depends on other countries for raw materials known as active pharmaceutical ingredients (API) and because our scientists can learn from and build upon foreign clinical testing and trials. There is now a real and growing concern that new rules restricting American companies from operating overseas could cut off American access to these resources and impede our ability to lead the world in the production of medicine. This would be a dangerous unintended consequence of well-intended rules.
China Is Trying to Take the Lead in Medicine and Biotech
The United States is the world’s leader when it comes to creating breakthrough cures and life-saving prescription drugs. Maintaining that lead is a critical national security issue. Simply put, Americans cannot be dependent on an adversary like China to provide us with medicine.
China has aggressively jumped into the global pharmaceutical marketplace. The Chinese government’s concerted efforts to step up production of new medicines and antibiotics are showing results.
30% of clinical pharmaceutical trial starts are now conducted in China, up from 9% in 2009. China has almost caught up to the U.S., which conducts 35% of new trials.
Chinese companies now lead the world with 39% of all clinical cancer treatment trials.
China developed 639 “first in class” drugs between 2022 and 2025. That was a 360% increase in Chinese pharmaceutical development compared to the previous three years.
China controls 45% of the active pharmaceutical ingredients (APIs) for all antibiotics.
Between 2020 and 2025, China approved more drugs to treat cancer than the Food and Drug Administration (FDA).
American policymakers cannot allow Chinese companies to take the lead in this critical strategic industry. It starts by ensuring that pharmaceutical supply chains run through the United States. It is also paramount that lawmakers do not tie the hands of our domestic industries and impede them from winning the global race to advanced technologies.
The U.S. Needs Clear Goals for Outbound Investment Restrictions
While passing new laws to restrict outbound investment into potentially dangerous overseas industries, Congress has given immense discretion to the Executive Branch. Instead of specifying which “dual-use” technologies should be covered by notice requirements or outright prohibitions, Congress gives that authority to the agency. Agencies like the Department of Treasury regularly bear responsibility for defining what kinds of products, technologies, and business deals are restricted.
Without an overarching set of principles for outbound investment restrictions from the government, America’s tech industries will be left guessing each time new rules are issued. Federal agencies should adopt a clear consensus framework to avoid haphazard application of Congressional mandates to keep our nation safe. Goals of America’s outbound investment restriction regime and Outbound Investment Security Program (OISP) should include the following:
Maintain America’s global leadership in technologically important industries.
Identify specific dual-use threats posed by doing business overseas.
Reduce exposure to foreign adversaries by ending supply chain dependence.
Ensure that outbound investment restrictions do not unintentionally do more harm than good by reducing America's global strategic leadership.
Target as narrowly as possible transactions that threaten American national security and prohibit those exchanges unequivocally.
Create domestic economic conditions that mitigate foreign advantages.
Policymakers need to better understand what, if any, U.S. transactions could be used by the Chinese for nefarious biological purposes. That way, we can target rules narrowly without broadly hurting the ability of trusted American innovators to compete and win overseas. This is a complicated but essential process in order to keep America safe through strength and global leadership. The Protecting America Initiative looks forward to being a part of this process.