The U.S.-China Economic and Security Review Commission has issued its annual report to Congress. The New York Analysis of Policy and Government will periodically present summaries of their work.
Beijing views its ability to deliver high-quality healthcare to Chinese citizens as a key aspect of maintaining its legitimacy, yet much of China’s healthcare infrastructure is out of date and struggles to meet even the basic needs of many patients. Consequently, Chinese policymakers have set ambitious targets for improvements to China’s healthcare system. In particular, the Chinese government has prioritized high-growth sectors such as biotechnology (biotech), digital health, and precision medicine. These sectors not only offer the potential of improving China’s healthcare system but also align with Beijing’s industrial policy goals of moving up the global value chain.
Despite officially encouraging foreign participation in China’s healthcare sector, the Chinese government continues to place foreign firms at a disadvantage, most notably in terms of collecting and sharing healthcare data, which is an increasingly vital component of new healthcare treatments. This data collection occurs through legal channels such as investment in U.S. firms and academic research partnerships as well as illicit methods such as state-sponsored hacking of U.S. healthcare providers and businesses. China’s collection of U.S. healthcare data raises privacy concerns for U.S. citizens. China’s
nonreciprocal collection of health data gives Chinese firms a distinct advantage in research and development, threatening to erode U.S. leadership in medicine and biotech by allowing Chinese companies access to both U.S. and Chinese datasets while blocking U.S. competitors from Chinese data. This comes at a time when the rapid advancement of biological sciences has led to a “biorevolution” that will have increasingly important economic and security implications.
While Chinese policymakers have aggressively supported cutting edge biotech developments, they have paid far less attention to China’s public health system. Years of underfunding, increasing staffing shortfalls, and bureaucratic weaknesses in much of China’s public health system have undermined the country’s ability to stop the spread of infectious diseases. Moreover, an increasingly repressive political atmosphere has silenced healthcare workers and journalists reporting on such outbreaks, preventing vital information-sharing in the early stages of the COVID-19 outbreak. Beijing’s unwillingness to cooperate or share information with foreign governments and international organizations further obstructed efforts to contain what was initially a localized outbreak. The widespread loss of human life and economic devastation in the wake of the COVID-19 pandemic has vividly exposed the shortcomings in China’s epidemiological preparedness and demonstrated the worldwide ramifications of the CCP’s policy priorities.
Key Findings
▶ Longstanding problems in China’s public health system, including funding shortfalls and bureaucratic weaknesses, have undermined the country’s epidemiological preparedness. These vulnerabilities are compounded by a political atmosphere that silences and punishes healthcare workers who raise concerns about potential disease outbreaks because the CCP fears such disclosures could undermine social stability. As a result, the risk of another epidemic in China will remain heightened even as Beijing attempts to improve its public health system in the wake of the COVID-19 pandemic.
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▶ The Chinese government has made the collection of domestic and foreign healthcare data a national priority and has sought access to U.S. healthcare data through both licit and illicit means. Chinese entities have gained access to U.S. healthcare data through investment in U.S. firms, sales of equipment and services, and partnerships with U.S. universities and hospitals, even as Beijing prevents U.S. entities from gaining reciprocal access to Chinese data. Chinese state-sponsored groups have also obtained U.S. healthcare data and targeted COVID-19 research by hacking U.S. healthcare providers and businesses.
▶ Through its scientific talent recruitment programs, the Chinese government has systematically targeted the U.S. research community, particularly participants in the biological and medical sciences. Although there are many benefits to research cooperation, Beijing has used financial inducements and other means to encourage foreign researchers to establish shadow laboratories in China that mirror federally funded research conducted in the United States and facilitate the transfer of commercially and medically valuable research to China.
▶ While China has made significant improvements to its healthcare system, substantial shortfalls remain. In particular, China lacks a long-term care infrastructure for its aging population and its healthcare system is underequipped to handle challenges posed by the rise in chronic disease.
▶ China’s policymakers are making major efforts to improve the quality and affordability of healthcare, prioritizing innovation in technologies and treatments to manage rising chronic disease. Prior to the outbreak of COVID-19, infectious disease monitoring and prevention have received comparatively less attention
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