How a €325m Irish factory became part of a geopolitical battle between US and China

“This is the start of something special,” the then taoiseach, Leo Varadkar, said in April 2018 when disclosing that Chinese biopharmaceutical corporation WuXi Biologics was to build a €325 million “facility of the future” at IDA Ireland’s Dundalk Science & Technology Park.
The manufacturing and research facility on a 26-hectare campus was the company’s first outside China, was supported by the Government through IDA Ireland and would lead to 500 highly skilled jobs, the Government said. The then head of the IDA, Martin Shanahan, said it was a “significant win” to have such a facility coming to Ireland. “It also shows that our strategy of market diversification is working.”
WuXi Biologics had been in talks with the IDA and the Ireland Strategic Investment Fund (ISIF) for “several years” before agreeing on the Dundalk project, the company’s chairman, Dr Ge Li said.
“This is our second major partnership in Ireland, following on WuXi NextCODE’s work with Genomics Medicine Ireland (GMI)”, he said, a reference to a controversial project involving the collection of large amounts of Irish DNA for research purposes (genomics means the study and mapping of people’s genetic make-up).
Building soon began on the Dundalk site while, globally, WuXi continued to grow.
In November 2019, the then minister for business, enterprise and innovation, Heather Humphreys, announced a new, €200 million vaccine production facility on the WuXi campus that would bring another 200 jobs. By this stage, WuXi’s clients globally included most of the world’s leading biopharma corporations, many of them US corporations with operations in Ireland that contribute hugely to our corporation tax take and provide thousands of high-end jobs.
Wuxi Biologics Ireland now employs around 600 people on the sprawling Dubalk campus.
Seen from today, the backing by Government, IDA and ISIF of the rapidly-growing Chinese biotech was indeed “the start of something special”, though not in the way Varadkar meant. Proposed new legislation in the US, the Biosecure Act, namechecks five Chinese corporations – WuXi AppTec, its sister company WuXi Biologics, BGI, MGI and Complete Genomics – that are to be deemed “biotechnology companies of concern” for national security reasons.
If it comes into law, as it seems it will, the act will prohibit US agencies not just from dealing with companies of concern, but from dealing with any companies that use equipment or services provided by a company of concern. It will, in effect, shut WuXi and the other Chinese corporations out of the US market.
According to Alexander Davey, a Dubliner who works as an analyst with the Mercator Institute for China Studies (Merics) in Berlin, Germany, the law will do even more than that.
“It will ban drugmakers with US government contracts from using the Chinese groups’ services after 2032. So, it would not just impact Ireland-based US multinational pharmaceutical companies doing business with Wuxi, but any drugmaker in Ireland with US government contracts doing business with Wuxi.”
The act has bipartisan support, was passed by the house of representatives (by 306 votes to 81) last month, and is expected to be backed by the senate after the US presidential elections in November. Although not yet law, it has already caused the WuXi Biologics share price in Hong Kong to plummet and triggered speculation that WuXi Biologics and WuXi AppTec will have to sell off plants not just in the US, but in Europe too, including in Ireland.
Meanwhile, members of the US senate’s homeland security committee have, according to reports, received intelligence briefings that WuXi AppTec transferred a US client company’s intellectual property (IP) to the Chinese authorities. The nature of the IP or the identity of the client has not been disclosed.
In response to the reports, the Chinese embassy in Washington DC said concerns that WuXi was a threat to national security were unwarranted while the company said it was not aware of any unauthorised data transfers. In a statement to the Hong Kong exchange on September 10th, WuXi AppTec said: “We firmly believe that WuXi AppTec has not posed, does not pose and will not pose a security risk to the United States or any other country.”
Early drafts of the Biosecure Act said the Chinese government was seeking to “dominate” the biotechnology industry, that companies headquartered in China – WuXi AppTec is headquartered in Shanghai – are required to hand over data to the government if ordered to do so, making them “an espionage tool of the CCP [Chinese Communist Party]” and that Chris Chen, chief executive of WuXi Biologics, “was previously an adjunct professor at the PLA’s [People’s Liberation Army] Academy of Medical Sciences.” The PLA is the armed wing of the Chinese Communist Party and the principal military force in China.
The proposed US law will allow the intelligence services update legislators so that new entities can be added to the list of companies of concern. The aim, according to the act, is to protect against the “risk to national security posed by human multiomic data from United States citizens that is collected or stored by a foreign adversary”.
Large set biological data, including DNA data, has become not just a rich resource for developing new medicines but a geopolitical battleground. The US act defines multiomic data as “data types that include genomics, epigenomics, transcriptomics, proteomics and metabolomics”. These are cutting-edge areas of scientific analysis that give insight into the way DNA impacts on particular cells or tissues in the body, as well as insights into particular molecules and proteins within the body’s cells and tissues.
Insights gained from these areas can help pharmaceutical companies come up with drugs to tackle disease by increasing their understanding of what causes a disease, and why it might occur in one individual rather than another.
According to Davey, some analysts were initially of the view that the Biosecure Act could lead to gains for Ireland, with investment shifting eastward across the Atlantic, but “it looks like this is not going to be the case now”. The act will stop corporations in the US from working with WuXi but also affect Irish drugmakers who have links with WuXi and want to do business in the US. There is, he said, a “decoupling going on” in respect of co-operation between US and Chinese companies.
Davey would like to know what happened to the DNA data that was collected in Ireland when WuXi was involved in its collection here by way of Genomic Medicine Ireland. Genomic Medicine Ireland has changed hands several times since it collected the data and is now owned by a US company, HiberCell Inc. A request for comment from Hibercell met no response.
“The Chinese have onshored a lot of their genomic data and they make sure that their genomic data is not overseas,” Davey said. “So, if they are doing that, what does it say about other countries that allow their genomic data to be available within China?”
He points out that in 2018, when there was a controversy in Latvia similar to the one in Ireland about the collection of DNA data by a Chinese corporation, the Latvian security services said Chinese private sector companies “are largely under the control of the Chinese government and are required to co-operate with Chinese authorities, including special services, when necessary. The activities of Chinese companies in Latvia are therefore associated with intelligence risks.”
The campaign of repression conducted by the Beijing government against the Uyghur and other Turkic, mainly Muslim, people in Xinjiang plays a part in the decoupling that is going on between China and western democracies, according to Dr Mark Munsterhjelm, an academic with the University of Windsor, in Canada, who studies racism and ideology in genetic research. A “pattern of fragmentation” in research networks involving the US and China began in 2019-20 when the world began to focus on what was going on in Xinjiang.
“These divisions gained momentum in the US and European Union over the impossibility of ethical research in Xinjiang in the context of growing evidence of and international concern over the mass incarceration and forced assimilation in Xinjiang that had begun with the crackdown in 2017.”
The secret collection of DNA data from the Turkic population in Xinjiang by way of a government-sponsored free annual physical exam was described by Human Rights Watch in 2017 as a “gross violation of human rights norms”.
In 2021, when the EU introduced sanctions against an entity and people in China accused of human rights abuses in Xinjiang, the Chinese introduced counter-sanctions against a number of European targets, including Merics. In 2022, the UN Human Rights Commission said the campaign of mass oppression and mass surveillance in Xinjiang may represent “crimes against humanity”.
In February this year, the US senate’s china committee wrote to the secretaries of the departments of defence, commerce and treasury to “strongly urge” them to investigate “WuXi AppTec and its subsidiary WuXi Biologics” which, it said, were “closely affiliated” with the PLA. The letter said the committee understood that both companies were linked to the campaign of oppression in Xinjiang. WuXi AppTec has “alarming ties to the CCP’s genocide in Xinjiang”, the letter said.
According to Dr Edward Burke, assistant professor in the history of war at University College Dublin, both WuXi AppTec and WuXi Biologics have received funding from the PLA “so they are viewed as a Chinese national security asset, not a normal company … We have to take PLA investment very seriously, because the People’s Republic of China sees itself as [being] in strategic competition not only with the US, but with the West in general, including the EU.”
Given the reports of the alleged theft of IP by China and espionage in Europe by China, it would, he said, be “incredibly naive for us not to take this seriously”.
The Irish State needs to develop an ability to make its own national security assessments in relation to foreign corporations but, in the meantime, it needs to listen to what it is being told by the EU and the US. “In terms of State institutions, the balance is wrong. The balance is very much focused on the IDA and the potential for investment. The focus on national security needs to be much more prioritised,” Burke says.
The European Commission has warned Ireland and other countries about what is happening, he said. “We need to sit up and say, this is not just another normal company working in the private sector that wishes to invest in Ireland for commercial gain. There is clearly a state aspect to this that needs to be considered very carefully.”
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Ireland has very important partners, not least the US, who invest a lot of foreign direct investment (FDI) into Ireland. “Our partners could begin to look at Ireland in a different way. This could become an obstacle to FDI if we are seen as lacking top cover in terms of national security, to ensure that a country like China is not in a position to interfere.”
China is becoming an increasingly repressive state and is a very significant threat, Burke said. “We have seen what they are capable of doing in Xinjiang. We have seen their capacity for increased repression, and our closest friends, other EU member states, are tapping us on the shoulder and warning us, and asking us to do more. I think to wave that away would fundamentally endanger our standing in the European Union and our relationship with key countries such as the United States.”
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Davey believes the message of the Chinese premier, Li Qiang, when he visited Ireland in January was that Ireland should not allow the US target companies based here just because they are Chinese. “The Chinese say they want Europe to be strategically autonomous, not aligned with the Americans,” he said. The irony, he said, is that Ireland, in seeking to diversify its FDI, has made things even more difficult for itself, irrespective of who wins the US presidential election. “Ireland has become a site of US-Chinese competition.”
Requests for comment from WuXi Biologics and the Chinese embassy in Dublin met no response.