A regulation passed in March by China's State Council requiring foreign scientists and foreign-invested institutions in China to seek government approval before scientific data can be moved overseas or to other foreign parties in China is hurting foreign companies with research investments in the country, the Financial Times said June 6.
U.S. companies are worried about the regulation's potential impact on their research partnerships with universities and local research and development centers, the FT said, citing China-based lawyers.
"Extra regulations may stifle efforts to develop these technologies and bring them to the China market," said Jake Parker, vice president of China operations at the U.S.-China Business Council.
Multinational companies targeting China's pharmaceutical market also face higher costs of entry under the new rules. China's pharmaceutical market was valued at $122.6 billion in 2017, the FT said, citing healthcare research group IQVIA.
Paul Haswell, a Hong Kong-based lawyer, said the new regulation's broad definition of scientific data may force companies to seek permission first before sending drug test and lab trial results to their headquarters or to overseas regulators.
U.S. companies are also unsure about how to comply with the new requirements and what would constitute scientific data under the new law. Parker said many of these data policies are "extremely vague to allow for significant interpretation by specific regulators."
The new restrictions on scientific data come as China tries to assert greater control over information produced within its borders, said the FT.
"[The law] runs the risk of handicapping international scientific research in the exaggerated interest of national security and industrial policy," said Lester Ross, head of the policy committee at the American Chamber of Commerce in China.
