Title page

Contents

Executive Summary 3

Introduction 9

Beijing's Drive for Sequencing Capacity: The Race from Genotype to Phenotype 12

The BGI-China Success Story: China's Hybrid Economy and the Power of National Champions 16

Piecing Together BGI's Corporate Structure: China's Hybrid Companies 19

Overlapping Leadership Blurs the Lines Between BGI and MGI and the State 22

State Provides BGI and MGI Funding 23

Government Guidance Funds Are Directly Invested in Both BGI and MGI 27

How Companies Grow: Characteristics of MGI and BGI's Market Growth 36

China's Hybrid Economy and Implications for the U.S. 42

Competitive Tools Available to the United States and Allies 45

Preparing to Compete in the Genomic Future 47

Conclusion 50

Authors 51

Acknowledgments 51

Appendix 1: Detailed Ownership Analysis 52

Appendix 2: Key Areas of Biotechnology 93

Bioinformatics 93

Synthetic biology 93

Gain of function research 93

Agricultural biotechnology 94

Data privacy, data security, and population surveillance 94

Appendix 3: China's Policies That Support Genomics and Biotechnology 95

Endnotes 98

Figure 1. Gene Sequencing Ecosystem 15

Figure 2. BGI's Evolution 18

Figure 3. BGI's Structure 22

Figure 4. Illustrative Ownership Example, MGI Tech Co. 26

Figure 5. MGI's 2022 Global Market Share Was Approximately 5.2% 35

Figure 6. MGI Revenue Breakdown by Region, 2017 versus 2021 35

Figure 7. MGI Revenue PRC Market Share, 2020-2022 36

Figure 8. Illustrative Cost of Capital Curve 37

Figure 9. MGI Tech Co. Illustrative Optimal Capital Structure (values in millions USD, unless otherwise stated) 39

Figure 10. BGI Genomics Illustrative Optimal Capital Structure (Values in millions USD, unless otherwise stated) 40

Boxes

Box 1. What Do We Mean by Global Norms? 10

Box 2. The Bioeconomy-Driver of Future Industry 13

Box 3. Would CFIUS Allow the Purchase of Complete Genomics Today? 42