In China, direct customers of Silicon Valley Bank were mostly biotechs. Cynics claim that reflected the willingness of the US lender to take on clients local rivals were wary of. SVB’s collapse flipped the risk profile, until the US authorities guaranteed deposits. But there are more fundamental reasons for bearishness on Chinese biotechs and other pharmaceuticals companies than where they bank.
Earlier this month, Washington added two subsidiaries of China’s largest genomics company BGI to a trade blacklist. It alleged the companies had conducted genetic analysis that was then used to repress ethnic minorities. BGI denied the claims, saying it does not engage in unethical practices.
The blacklisting will make it hard for BGI to buy US supplies. It may also discourage customers in other foreign countries from dealing with it. BGI has expanded overseas thanks to surging demand for Covid-19 testing. Sales from foreign markets accounted for nearly two-thirds of revenues at the peak of the pandemic.