China Advances Draft Export Controls on Biotech Platforms, Emphasizing Product-Specific Licensing

China’s Ministry of Commerce (MOFCOM) and Ministry of Science and Technology have jointly issued a consultation announcement proposing significant additions to the Catalogue of Technologies Prohibited or Restricted from Export (Catalogue). Published on October 16, 2026, Announcement No. 48 targets technologies in artificial intelligence, biotechnology, and photovoltaics, with biotechnology receiving particular focus through new restrictions and prohibitions.

The draft rules introduce an immediate requirement for pre-export registration of covered technology transfers. This registration applies to all in-scope transactions, including those already signed but not completed, as well as share acquisitions that result in “actual control” over the technology. Exporters must register these transactions through MOFCOM’s technology trade system before any technical data or assistance crosses China’s borders.

Critically, the proposed prohibitions target outbound transfers of ownership in biotechnology platform technologies. Two specific entries—covering proprietary cell and gene therapy (CGT) platforms (262704J) and small interfering RNA (siRNA) drug technology platforms (262705J)—would prohibit such ownership transfers outright. However, the draft expressly exempts ownership-retaining product licenses, as well as outsourced research or manufacturing services that do not transfer ownership.

The concept of a “platform” is defined as an accumulated, reusable set of underlying common technologies capable of supporting multiple drug candidates. This excludes process technologies used solely for the development of a single drug. Consequently, product-specific process transfers necessary for drug development, testing, production, quality control, marketing, and compliance are not subject to the platform ownership prohibitions but require separate evaluation.

Beyond platform ownership, the draft also introduces two restricted-export entries (262705X and 262706X) concerning proprietary technologies for discovering and validating wholly novel drug targets in cell and gene therapy and siRNA. The novelty criterion hinges on whether the target has been publicly disclosed anywhere globally, including through patents, academic literature, public databases, industry materials, or conferences. Notably, the novelty of the discovery method itself is not required.

The draft does not impose a general ban on in-licensing Chinese drug candidates. Instead, it distinguishes between ownership of reusable platforms and rights to use those platforms. Ownership-retaining licenses are explicitly excluded from the platform ownership prohibitions, but their scope must be sufficient to support the buyer’s intended development, manufacturing, and commercialization activities.

Multinational pharmaceutical companies are advised to structure transactions as product-specific licenses rather than acquisitions of platforms or entities to preserve deal viability. Buyers should rigorously assess whether the licensed rights and technical support enable global development, manufacturing transfers, and follow-on programs. A license may be legally available yet insufficient to provide the operational independence that an acquisition would typically secure.

Industry data underscores the significance of these developments. In 2025, mainland Chinese innovative-drug and platform out-licenses numbered 157, with a potential value of $135.7 billion and upfront payments totaling $7 billion. For the first half of 2026, reported values reached $99.7 billion. The National Medical Products Administration disclosed on September 14 that 2026 out-licensing value had surpassed $120 billion, with upfront payments exceeding $10 billion. These figures include contingent payments and do not specifically measure exposure to the five draft Catalogue entries.

The draft’s pre-export registration requirement applies from the announcement’s publication until the revised Catalogue takes effect. It covers overseas transfers of technology ownership, authorizations to use technology abroad, and changes resulting in an overseas party becoming the owner or actual controller of technology in China. Exporters must evaluate all outstanding deliveries and ownership or control changes, even for signed agreements, as registration does not exempt incomplete exports.

The consultation period closes on November 15, 2026. The registration form requests detailed information about recipients, technology descriptions, intended uses, and transaction values. Buyers should review these disclosures carefully to ensure accuracy and consistency with contractual terms.

The draft’s Annex 1 includes control descriptions and exclusions, but it does not clarify how every exclusion operates during the interim period. Particular attention is warranted for platform licenses coupled with changes in actual control, as no blanket filing requirement or exemption applies uniformly to all biotechnology licenses or ownership-retaining arrangements.

Finally, companies must recognize that securing clearance under China’s draft export controls does not obviate compliance with US regulatory requirements. Biotechnology export restrictions continue to evolve in the US Congress, underscoring the need for comprehensive cross-jurisdictional compliance strategies.

In summary, China’s proposed biotechnology export controls impose new complexities on multinational licensing and acquisition strategies. Careful transaction structuring, thorough due diligence, and proactive regulatory engagement will be essential for companies seeking to navigate this shifting landscape effectively.