Special Report: COVID opens new doors for China's gene giant
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[August 05, 2020]
By Kirsty Needham
SYDNEY (Reuters) - As countries scramble to
test for the novel coronavirus, a Chinese company has become a go-to
name around the world.
BGI Group, described in one 2015 study as "Goliath" in the fast-growing
field of genomics research, is using an opening created by the pandemic
to expand its footprint globally. In the past six months, it says it has
sold 35 million rapid COVID-19 testing kits to 180 countries and built
58 labs in 18 countries. Some of the equipment has been donated by BGI's
philanthropic arm, promoted by China's embassies in an extension of
China's virus diplomacy.
But as well as test kits, the company is distributing gene-sequencing
technology that U.S. security officials say could threaten national
security. This is a sensitive area globally. Sequencers are used to
analyse genetic material, and can unlock powerful personal information.
In science journals and online, BGI is calling on international health
researchers to send in virus data generated on its equipment, as well as
patient samples that have tested positive for COVID-19, to be shared
publicly via China's government-funded National GeneBank.
As BGI's foothold in the gene-sequencing industry grows, a senior U.S.
administration official told Reuters on condition of anonymity, so does
the risk China could harvest genetic information from populations around
Underpinning BGI's global expansion are the Shenzhen-based company's
links to the Chinese government, which include its role as operator of
China's national genetic database and its research in
government-affiliated key laboratories. BGI, which says in stock market
filings it aims to help the ruling Communist Party achieve its goal to
"seize the commanding heights of international biotechnology
competition," is coming under increasing scrutiny in an escalating Cold
War between Washington and Beijing, Reuters found.
Reuters found no evidence that BGI is violating patient privacy
protections where these apply. Responding to questions from the news
agency, BGI said it is not owned by the Chinese government.
"Under the current political climate, the fear raised about the use of
BGI's technology is unfounded and misleading," BGI said in a statement
to Reuters. "BGI's mission is, and has always been, using genomics to
benefit people's health and wellbeing."
China's foreign ministry said in a statement the country has been open,
transparent and responsible in "sharing information and experience with
the international community, providing supplies to relevant countries"
including COVID-19 test kits and protective equipment, and helping
countries improve epidemic control.
The extent of BGI's endeavours to dominate an industry with geostrategic
value, as well as of its efforts to gather genetic data from around the
world, was pieced together by Reuters from public documents and dozens
of interviews with scientists, researchers and health officials.
Some U.S. officials warn of a dual risk to national security from BGI:
Sensitive genetic information about U.S. citizens may fall into foreign
hands, and American companies stand to lose their innovative edge in the
field of genomics to Chinese firms.
Earlier this year, the U.S. National Counterintelligence and Security
Center (NCSC) published practical tips for health services to avoid
"potential threats posed by foreign powers" in connection with COVID-19
tests. Other officials draw parallels between BGI and Huawei
Technologies Co., the Chinese telecommunications titan whose 5G
technology the United States says could be used to capture personal data
that Beijing could exploit. Huawei has said it would refuse to cooperate
Sharing data is essential for medical research. But in the case of
genetic data, officials and scientists say the risks are that it could
Individuals can be identified by a portion of their DNA, and some
researchers have found genetic links with behaviours such as depressive
disorder. A hostile actor could use such data to target individuals for
surveillance, extortion or manipulation, according to a comprehensive
report prepared for the U.S. Office of the Director of National
Intelligence by science and medical experts in January, which added that
such associations are not yet well understood.
Knowledge of the genetic makeup of national decision-makers or the
military, and their propensity to act in certain ways, could be used by
adversarial intelligence agencies as a mechanism of influence, said the
report, "Safeguarding the Bioeconomy," from the National Academies of
Sciences, Engineering and Medicine. Genetic data could reveal a U.S.
vulnerability to specific diseases, it added.
As companies race to develop and patent biological drugs for the global
market, the ethnic diversity of the U.S. population makes U.S. genomic
data more valuable than data from countries with homogeneous
populations, the report said. That's because the more varied the data,
the bigger the advantage in identifying genetic disease. The report
raised the possibility BGI could amass DNA sequence information from
U.S. genetic samples that would give it an "asymmetrical" advantage over
Genetic information, including family medical history, "is of enormous
value and can be exploited by foreign regimes for a range of security
and economic purposes," Bill Evanina, director of the NCSC, told Reuters
in response to questions about Chinese genomic companies.
BGI and Huawei have said they work together. In a video that is no
longer available on Huawei's site, a BGI executive said it processes
"staggering volumes of data" from its gene sequencers, stored on
Huawei's high-powered systems. In response to questions from Reuters
about whether this information could be shared with China's government,
Huawei said only users of its technology can define who to share data
with. "Huawei's Cloud technology and cloud computing services are secure
and compliant with international security standards," it said, adding it
complies with all laws.
BGI said it does not have access to patient data from its diagnostic
The company said it is conducting scientific research on the genomes, or
genetic blueprints, of the virus and patients with COVID-19. But it said
this research is separate from the tests it provides to other nations to
Asked about China's genomics ambitions, a U.S. State Department
spokesman said: "We believe countries need to be able to trust that
vendors will not threaten national security, privacy or intellectual
property. Trust cannot exist where a company is subject to an
authoritarian government, like the People's Republic of China, that
lacks prohibitions on the misuse of data."
FROM "WHO1" TO FIRE EYE
BGI was involved in China's response to the coronavirus from the start.
Its scientists were among teams that sequenced the virus genome and
shared that information in January.
On Dec. 26, BGI collected and tested a throat swab from a 44-year-old
man who was a patient in the military hospital in Wuhan, according to a
record of the sequence that was shared with other researchers on a
global database. The World Health Organisation (WHO) learned of cases of
pneumonia of an unknown cause in Wuhan on Dec. 31; the blueprint of the
patient's virus was named WHO1.
The week after that first test, BGI took swabs from another three
patients at the hospital who had been to the local seafood market,
according to a paper published by Chinese scientists in The Lancet on
Jan. 29. BGI sequenced these samples.
By month's end, the company had designed an automated laboratory for the
Wuhan government to massively increase testing. BGI called the design
"Fire Eye," after the ability of China's fabled Monkey King to see
The labs were replicated in China, and the Mammoth Foundation – a
charity established a few months earlier by BGI – started donating tests
and laboratories worldwide. By mid-year, BGI's COVID-19 lab equipment
was installed in at least 10 countries thanks to donations by the
charity, company statements and local news reports show.
China's government helped coordinate some of BGI's deals. The Solomon
Islands said it had received a $300,000 cheque from the Chinese embassy,
which advised the island nation to buy tests and lab equipment from BGI.
China's foreign ministry said China has done its best to ensure safety
and reliability of medical supplies.
Besides donations, BGI has reported lab deals worth hundreds of millions
of dollars. As technicians in white protective suits build Fire Eye labs
in countries from Australia to Saudi Arabia, BGI Genomics, a listed
subsidiary of the group, said last month demand would help boost profits
by 700% for the first half of the year to more than $218 million.
There are two main aspects to BGI's COVID-19 programme.
First, diagnostic test kits, which come with high-speed processing
robots to handle large volumes, work by detecting the genetic material
of the virus in a patient's sample to tell if a person has been
infected. BGI says these tests do not give access to patient data.
The second part, which the company offers as an add-on in its marketing
materials, is gene-sequencing equipment.
In the pandemic, researchers around the globe are using sequencers to
track mutations in the virus, see which mutation is spreading, and
choose strains or samples to work with for vaccine development.
Underpinning demand for DNA sequencers is also their role driving a
lucrative medical field known as precision or personal medicine.
Rather than seek one-drug-suits-all treatments, precision medicine
focuses on how different people's genes interact with their environment
to help predict their risk of disease, or their response to medications.
[to top of second column]
Scientists work with samples taken for testing for the coronavirus
disease (COVID-19) in the "Huo-Yan" (Fire Eye) National Laboratory
for Molecular Detection of Infectious Agents in Belgrade, Serbia May
12, 2020. REUTERS/Marko Djurica
In July, BGI Genomics, BGI's listed subsidiary on the Shenzhen stock
exchange filed for a $293 million capital hike, telling investors in
the filing their support would help it collect as much patient data
as possible, "on the human body, genome, people's living habits and
environment, so we can understand more, and diagnose in a more
The company also says it plans to promote the Fire Eye labs it rolls
out for COVID-19 for precision medicine after the pandemic.
FROM CUSTOMER TO RIVAL
BGI was set up by four scientists in 1999 as a non-profit research
body called the Beijing Genomics Institute, to enable China to join
a global project to map the human genome. Since 2016, its
headquarters have housed and operated the government-funded China
National GeneBank, a biorepository of 20 million plant, animal and
human genetic samples.
In 2010, BGI received a $1.5 billion loan from the state-run China
Development Bank, some of which it used to buy 128 sequencing
machines from an American firm, San Diego-based Illumina Inc.
Two years after that, Beijing said in a State Council plan for the
bio-industry that it wanted China to develop gene sequencing
technology. In 2013, BGI succeeded in buying Illumina's largest
competitor, California-based Complete Genomics, for $118 million.
That is now the U.S. research arm of the Chinese group. BGI Group
launched its own sequencing equipment in 2015; the group floated BGI
Genomics in 2017.
This year, BGI Genomics told investors that it had cost $95 million
to sequence a whole human genome in 2001. By 2014, Illumina had
announced it reduced the cost to below $1,000. Now BGI could do it
In May, MGI Tech, the BGI subsidiary that makes DNA sequencers,
raised $1 billion in venture capital.
But after BGI indicated it would launch its sequencers in the United
States, it ran into a challenge - an accusation of intellectual
property violations from Illumina. In June, a U.S. court issued a
preliminary injunction banning the sale, distribution or promotion
of BGI's materials and equipment, pending a trial to decide if the
technology was copied from Illumina.
Seeking the injunction, Illumina's lawyers told the court: "BGI
plans extreme price cutting and ambitious sales directly against
BGI declined to comment on the case. In court papers, BGI denied
infringing Illumina's patents and asked that parts of the injunction
be put on hold while it appealed the ruling. Illumina told Reuters
COVID-19 will boost sequencer demand.
"MORE VALUABLE THAN GOLD"
With a price tag of between $20,000 for a portable model and $1
million for a powerful machine, gene sequencers are an important
part of a country's pandemic armoury.
Even before the new coronavirus, in October 2019, Ethiopia's
government said it would establish a genomics lab with equipment
donated by BGI. Months later, Illumina donated sequencers to 10
African nations to help monitor the virus, the U.S. company said.
At least five countries worldwide have received BGI's sequencers
with the Fire Eye labs, according to statements the countries or BGI
have released. In many cases BGI does not own or operate the Fire
Eye laboratories, but simply provides the equipment, the company
For BGI, sequencers offer more than money. It has said they will
also help it study the virus in large populations.
One recipient of BGI sequencing equipment is Serbia, the Balkan
country where Beijing has invested heavily as part of its One Belt,
One Road initiative to open trade links for Chinese companies. Two
labs have opened there. Both were donated by Chinese companies,
Beijing and Belgrade said.
After the first lab opened, coordinator Jelena Begovic told Reuters
in May that DNA sequencers help researchers by linking genetic
information on the virus with genetic information on the patient. In
future, she said, the labs would underpin cooperation with BGI.
"Information is nowadays sometimes more valuable than gold," she
said. "In that sense, this is also a source of information for them
regarding this region."
Prime Minister Ana Brnabic told an opening ceremony that after the
pandemic, "We will have the most modern lab, which will enable us to
start talking with BGI on how to build the most advanced institute
for precision medicine and genetics in this region."
Sweden, too, has received sequencing equipment from BGI. The
Karolinska Institute, a medical university in Stockholm, hopes to
use it to identify a human genotype that is more susceptible to the
disease, microbiology professor Lars Engstrand said in a
presentation on BGI's website.
Asked by Reuters about the risk Swedish genomic data may be
collected by the Chinese government, Engstrand said this was "a very
relevant question" and the institute's IT security department had
scrutinised its collaboration with BGI.
"There will be no sequence information sent to any other servers or
computers outside our institute," said Engstrand, who heads the
institute's Center for Translational Microbiome Research, in an
email. "No cloud solution will be used for these sensitive data."
He was unsure if the institute would go ahead with sequencing human
genomes, he added.
Researchers globally are sharing virus data, but BGI has also set up
its own sharing platform, the "Global Initiative on Open-source
Genomics" for the new coronavirus.
On a website together with the China National GeneBank,
giogs.genomics.cn, it invites international scientists to send in
virus information including patient age, gender and location,
collected in accordance with local regulations.
"You will be asked to share virus genome data to the public via (the
National GeneBank) in the first instance," the site says.
In exchange, the site offers sequencing services and "considerable
support" for the cost of kits and reagents.
BGI told Reuters it had received no patient samples under this new
programme - samples have been sequenced in local facilities.
It said its goal is to "develop more high-quality genome data of
(the) virus with BGI's sequencing solution." It said it wants to
facilitate the rapid and open sharing of genome data to support
research on the virus.
Besides the National GeneBank, BGI's headquarters also house at
least four government-designated "Key Laboratories" for genomic
research, which are also government-funded. BGI said this funding is
used for research, not operations.
One of the labs supported a study by a dozen BGI researchers who
sequenced the genomes of more than 300 COVID-19 patients in a
Shenzhen hospital, according to a paper they shared on MedRvix, a
website for pre-published scientific papers.
"We and the others are continuing to recruit patients and data in
China and around the world to understand the host genetic background
underlying the varying clinical outcome of the patients," the
As rapid COVID-19 tests are adopted globally, the researchers added,
it will be important to study patients who don't show symptoms. The
study's lead author didn't respond to questions from Reuters.
BGI's pandemic push comes as tensions between China and the United
States are mounting, including over China's genetic programme.
Two BGI subsidiaries were blacklisted by the U.S. Commerce
Department last month for China's alleged human rights violations.
Washington alleged BGI is involved in conducting genetic analysis of
Uighur Muslims in Xinjiang in western China, where U.N. experts and
activists say Muslims were held in detention centres.
BGI said in a statement it "does not condone and would never be
involved in any human-rights abuses." Chinese officials say the
camps are educational and vocational institutions and deny they
violate the human rights of the detainees.
China's security apparatus is a BGI customer. Another BGI
subsidiary, Forensic Genomics International, says on its website it
works with China's Public Security Bureau. It had multiple contracts
with the police to collect male DNA samples, as well as samples from
some newborn babies, a survey this year by the Australian Strategic
Policy Institute found.
BGI said the forensics subsidiary complied with scientific ethics
and the law. The foreign ministry declined to comment.
(Needham reported from Sydney; Additional reporting by Daniel Levine
in San Francisco, Ivana Sekularac in Belgrade, Tova Cohen in Tel
Aviv, Joel Schectman and David Brunnstrom in Washington, D.C., Cate
Cadell in Beijing, Steve Stecklow in London, David Kirton in
Shenzhen; Edited by Sara Ledwith)
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