James Mulvenon's Wuxi report mistakes mutual funds for state investment, distorts joint lectures and awards
How the U.S. defense contractor resorts to smear by association without offering evidence against the Chinese company that helps save American lives.
Dr. James C. Mulvenon on April 19 dropped a report entitled The Wuxi Group: The National Security Risks Associated With Its Government and Military Connections, Data Privacy Issues, and Corporate Reach [PDF].
I decide to write about it because
Dr. James C. Mulvenon is not nobody. In 2021, he was interviewed for the role of Undersecretary of Commerce for Industry and Security, in charge of the Entity List, according to a Reuters report at the time, which also describes him as “a defense contractor who helped land Chinese semiconductor giant SMIC on a U.S. blacklist last year.”
The report topped Bill Bishop’s Sinocism on Friday, April 26, the most influential newsletter on China read by nearly 200,000 including all the impactful Westerners working on China.
The WuXi Group, and in particular its leading firms WuXi Biologics and WuXi AppTec, is “the target of two U.S. bills that seek to prohibit U.S. federal agencies from contracting with or granting funds to certain Chinese biotech companies,” according to the Wall Street Journal. Some U.S. intelligence officials claimed in March that Wuxi shared US client's data with Beijing without consent, which the company denies and cannot be independently confirmed.
That is despite, according to The New York Times, the company being “heavily embedded in the U.S. medicine chest, making some or all of the main ingredients for multibillion-dollar therapies that are highly sought to treat cancers like some types of leukemia and lymphoma as well as obesity and H.I.V.”
WuXi AppTec’s Shanghai- and Hong Kong-listed shares have lost 40% and 54%, respectively, this year.
The report, with no disclosure of its funding, the affiliation of its author in its production, or any potential conflict of interest, follows other public accusations against the Shanghai- and Hong Kong-listed company.
Its timing is also interesting. Four days after the sympathetic New York Times report which cites U.S. industry voices in acknowledging Wuxi’s enormous contribution to making “key U.S. drugs,” Mulvenon’s report touts, without substantiation, “Although WuXi is well connected, it is far from indispensable to the U.S. pharmaceutical supply chain,” and rebukes its “interconnectedness in America’s biotechnology supply chain.” The rehashed material sounds like a tepid reaction to the NYT report.
I believe I was subtweeted on X, formerly known as Twitter, to come up with a rebuttal :)
Today, I’m sharing my analysis of The WuXi Group’s Ties to the People’s Liberation Army and China’s Military-Industrial Complex section (Pages 13 and 14) of Mulvenon’s report, because
Of all the “national security risks” to the U.S., the Wuxi group’s alleged “military connections,” as highlighted in the report’s title, should be the most serious - if they are true.
This part sheds light on the ploy and quality of the research.
I haven’t got enough time to go over the entire report.
I wish also to add:
I have no beef against Dr. James C. Mulvenon. As the Chinese saying goes, this is 对事不对人 solely focused on the report and nothing personal.
I do not own Wuxi shares, options, or whatever. I have had no contact with Wuxi. Even my employer is unaware of this post coming up.
Before going through every claim in the section spanning Pages 13 and 14 and perhaps dulling you with a lot of names and technicalities, let me give you a quick breakdown of the last paragraph of the section:
The WuXi Group’s funding streams are also intertwined China’s broader Military-Civil Fusion development strategy. They have received investment from the “Aviation Industry Corporation of China Military-Civil Fusion Selected Hybrid Securities Investment Fund” (中航军民融合精选混合型证券投资基金), which was explicitly set up to invest in enterprises engaged in military production.[42] Additional PLA-linked investment funds that have funded WuXi Group companies include the Changxin National Defense Fund (长信国防军工量化灵活配置混合型证券投资基金) and the CSI Military Industry Securities Investment Fund (申万菱信中证军工指数分级证券投资基金) among a range of others. [43] While the WuXi Group’s precise involvement in military production activities is not known, this range of military-focused investment underscores the firm’s importance to the PLA’s broader ambitions to integrate military capabilities with civilian biotechnology advancements. [44]
This paragraph actually triggered me to write this lengthy post, because it took me two seconds to tell this paragraph is all wrong - mistaking commercially-run mutual funds openly available to retail investors of China’s stock market for state-run investment funds.
The three mutual funds named in the report for investing in Wuxi are not set up by the Chinese government or military to help anyone. They are, as mutual funds in the United States, set up by professional money managers who make money by pooling investor money, and then buy and sell publicly-traded shares in the stock exchange, whereby they extract management fees and take a cut from potential gains (Good luck!).
This is already enough to have shut down his argument. But allow me to indulge you with more details of the three funds.
Public disclosures show the “Aviation Industry Corporation of China Military-Civil Fusion Selected Hybrid Securities Investment Fund,” held Wuxi shares worth 1.3435 million yuan, or 185,000 USD, at the end of Q2 2019 . It held zero Wuxi shares at the end of Q3 2019 - and at the ends of each quarter later.
(Disclosure at Q2 2019)
Mulvenon’s linked information, in Footnote 42, includes the following snapshot and
says the fund, despite naming itself Aviation Industry Corporation China Military-Civil Fusion Selected Hybrid Securities Investment Fund, “didn’t hold any military-related at the ends of each quarter from Q4 2019 through Q1 2021, but invested heavily in banks, food and beverages, and medicine and pharmaceuticals.” [甚至在2019年Q4-2021年Q2这一年半的时间压根就没有配置军工股。据ifind数据显示,这段时间配置银行、食品饮料、医药生物轮流成为第一重仓行业]
Does that sound like a fund set up by the government or military to support military companies? No because it’s a mutual fund and professional money managers only care about making money. Despite advertising “military-civil fusion” in its name, they will just trade shares that they think will be profitable. But the lesson for the purpose of this analysis is that Mulvenon didn’t read carefully the link he cited.
Now on to the other two funds he named - “Changxin National Defense Fund” and “CSI Military Industry Securities Investment Fund.” Mulvenon cited an IPO announcement, in Footnote 43, to demonstrate they invested in Wuxi.
What he didn’t realize is that the IPO announcement showed investors who had applied buy Wuxi shares, not who succeeded in buying them. That is because the IPO was oversubscribed, meaning the investors who applied didn’t get to buy all they wanted.
So, how much did the two funds succesfully invest in Wuxi App Tec? Another disclosure, released one day after the IPO announcement that Mulvenon cited, showed each was allocated 4,741 shares at the price of 21.6 yuan per share.
That is, each of the two funds successfully invested 4,731*21.6=102,189.6 yuan, or 14,400 USD in Wuxi App Tec during the company’s IPO.
Another way to think about it: the two funds applied to buy 3 million shares each of Wuxi App Tec during the IPO. If the all-powerful Chinese state or military really wants these two funds to help the company, how come they ended up just being allocated 4,741 shares respectively? [The fact is they are at least 90% owned by individuals, respectively, according to disclosures 1 and 2.]
Wuxi App Tec completed its IPO in Shanghai on May 8, 2018. Public disclosures in Q2 2018 by “Changxin National Defense Fund” and “CSI Military Industry Securities Investment Fund” showed neither held Wuxi shares at the time, meaning they had sold their shares.
In summary, even if one doesn’t know how mutual funds work, one could have calculated the actual investments made by the three non-governmental, commercially-driven, professional managers-run pool of mom-and-pop money amounted to $185k, $14.4k, and $14.4k each. And that each of the investments lasted for less than one quarter.
And these are the evidence Mulvenon provided to prove
The WuXi Group’s funding streams are also intertwined China’s broader Military-Civil Fusion development strategy…While the WuXi Group’s precise involvement in military production activities is not known, this range of military-focused investment underscores the firm’s importance to the PLA’s broader ambitions to integrate military capabilities with civilian biotechnology advancements. [44]
“This range of military-focused investment”…”underscores the firm’s importance to the PLA’s broader ambitions”?
Bill Bishop, for whom I have a lot of respect, wrote in Sinocism on Mulvenon's report “Policymakers may find it interesting, shareholders and management may hate it.”
I disagree. Shareholders and management should love it, because the report by the also-ran for the Undersecretary of Commerce for Industry and Security can be a poster boy for the quality of the research underpinning paranoia and persecution against Wuxi, and they should make an example of Mulvenon's report by meticulously debunking it - before it’s too late.
The entire The WuXi Group’s Ties to the People’s Liberation Army and China’s Military-Industrial Complex section (Pages 13 and 14) is as follows, and I’m gonna go through every claim.
The WuXi Group’s Ties to the People’s Liberation Army and China’s Military-Industrial Complex
The WuXi Group has a range of ties to both the PLA and initiatives of the wider PRC militaryindustrial complex that either have a national security focus or that incorporate both civilian and military interests. There are numerous interactions at the level of leading personnel, such as WuXi Biologics CEO Chen Zhisheng (陈智胜) delivering a joint lecture at Tsinghua University together with Major General Chen Wei (陈薇) of the PLA’s Academy of Military Medical Sciences (解放 军军事科学院军事医学研究院 or PLA AMMS) in 2019. [37]1 WuXi AppTec has presented awards to researchers from PLA AMMS for their research contributions, and in recent years its management committee has included representatives from PLA AMMS, the Fourth Military Medical University (第四军医大学), which is known to carry out military biological warfare research, and the Chinese Academy of Sciences, which is heavily involved in dual-use science and technology research. [38]2 WuXi Group scientists have also conducted joint academically published scientific research with the PLA’s 2nd Military Medical University and No. 401 Hospital.[39]3 This range of military-focused personnel serving on WuXi Group management committees suggests at least some degree of civil-military fusion in the company’s research and development activities. [40]4 Joint lectures and awards naturally suggest that other forms of cooperation such as joint projects may be occurring as well.
WuXi Group executives have also been brought into broader government initiatives featuring military personnel and likely dual-use objectives. Through the “Major New Drug Creation Initiative” (新药重大创制”科技重大专项) within the Thirteenth Five-Year Plan, WuXi AppTec Deputy CEO Chen Shuhui (陈曙辉) was appointed in 2016 to the Initiative’s core committee where he served with representatives of the Fourth Military Medical University, the Military Medical Science Academy’s Institute of Pharmacology and Toxicology (军事医学科学院毒物药物研究所), and the Chinese Academy of Sciences. The committee’s aim is to grow China’s pharmaceutical research and development ecosystem across all stages of development, and the representatives chosen for the committee strongly indicates that it oversees dual-use range research and development activities. [41]5
The WuXi Group’s funding streams are also intertwined China’s broader Military-Civil Fusion development strategy. They have received investment from the “Aviation Industry Corporation of China Military-Civil Fusion Selected Hybrid Securities Investment Fund” (中航军民融合精选混合型证券投资基金), which was explicitly set up to invest in enterprises engaged in military production.[42]6 Additional PLA-linked investment funds that have funded WuXi Group companies include the Changxin National Defense Fund (长信国防军工量化灵活配置混合型证券投资基金) and the CSI Military Industry Securities Investment Fund (申万菱信中证军工指数分级证券投资基金) among a range of others. [43]7 While the WuXi Group’s precise involvement in military production activities is not known, this range of military-focused investment underscores the firm’s importance to the PLA’s broader ambitions to integrate military capabilities with civilian biotechnology advancements. [44]8
As you might have noticed, the central scheme here is “guilt by association.” Here is ChatGPT on “guilt by association” (not that ChatGPT is always reliable)
"Guilt by association" is logically unsound because it relies on the flawed assumption that because two entities or individuals are associated with each other in some way, the characteristics or actions of one can be automatically attributed to the other. This assumption overlooks the complexity and nuance of human relationships and situations.
Here are a few reasons why "guilt by association" is logically unsound:
Lack of Causality: Association does not imply causation. Just because two entities are connected or associated in some manner does not mean that one caused the actions or characteristics of the other.
Individual Agency: Each person or entity has its own agency and autonomy. Even if someone is associated with a group or individual that engages in questionable behavior, it does not necessarily mean that they share the same beliefs, values, or actions.
Context Matters: The context of the association is crucial. People may be associated with others for a variety of reasons, such as professional relationships, family ties, or mere proximity. Without considering the context, it is illogical to assume that one shares the responsibility or attributes of another.
Generalization Fallacy: Guilt by association often involves making sweeping generalizations. It overlooks the diversity within groups and individuals, assuming that all members of a particular group share the same characteristics or beliefs.
Justice and Fairness: Holding someone accountable for the actions of others without evidence of their own wrongdoing is unjust and unfair. It undermines principles of justice and due process.
In conclusion, "guilt by association" is logically unsound because it oversimplifies complex relationships, ignores individual agency, relies on faulty assumptions, and can lead to unjust outcomes.
1. Alumni lecture as an example of “numerous interactions” between Wuxi and PLA
The WuXi Group has a range of ties to both the PLA and initiatives of the wider PRC militaryindustrial complex that either have a national security focus or that incorporate both civilian and military interests. There are numerous interactions at the level of leading personnel, such as WuXi Biologics CEO Chen Zhisheng (陈智胜) delivering a joint lecture at Tsinghua University together with Major General Chen Wei (陈薇) of the PLA’s Academy of Military Medical Sciences (解放军军事科学院军事医学研究院 or PLA AMMS) in 2019. [37]
The report claims “numerous interactions at the level of leading personnel” between the Wuxi Group and the PLA, but the only example shown - hence the sharpest example Mulvenon could present - was a “joint lecture” where two people appear in one classroom together.
Here are details about the joint lecture, per the link in Footnote 37, which is actually a web page mirroring a Tsinghua University webpage
On the evening of December 20, Major General Chen Wei, Director of the Biotechnology Research Institute at the Academy of Military Medical Sciences and an alumnus of the 1988 Chemical Engineering graduate class of Tsinghua University, along with Dr. Chen Zhisheng, CEO of WuXi Biologics and an alumnus of the 1989 Chemical Engineering class at Tsinghua, were invited to jointly lecture on "Biopharmaceuticals and Health Industry" during an introductory course on "Chemical Engineering and Polymer Science". Over 120 freshmen from the departments of Chemical Engineering, Chemistry, Materials Science, Environmental Science, Life Sciences, Medical Sciences, and Geosciences attended the session to hear the inspiring reports from the two alumni…
Major General Chen Wei used her personal work experience as a clue to passionately share her experiences in combating severe viruses, highlighting international frontiers and practical progress in areas such as biosafety, virus defense, and vaccine development, prompting profound reflections…
Dr. Chen Zhisheng titled his presentation "The Story of Intelligent Manufacturing of Biopharmaceuticals in China," approaching the topic from the perspective of the therapeutic antibody industry, and discussing the development opportunities and challenges of China's biopharmaceutical industry through data analysis. Using WuXi Biologics as an example, he shared the industry's development process vividly showcasing the rise and achievements of China's biopharmaceutical industry…
“The Introduction to Chemical Engineering and Polymer Science” is overseen by Professor Zhu Bing from the Department of Chemical Engineering. Renowned experts and scholars from academia, industry, and research both inside and outside the university are invited to lecture to first-year students on topics such as talent cultivation in chemical engineering and polymer science, advances in disciplinary frontiers, industrial development, social responsibility, and contributions.
Classroom lectures cover a wide range of topics including innovation-driven sustainable chemical engineering, resource and energy chemical engineering, polymer science, industrial biotechnology, materials chemical engineering, chemical engineering intelligent manufacturing, pharmaceuticals and healthcare industry, and diversified development.
Each topic is typically co-taught by an industry expert and a disciplinary professor.
In addition to classroom teaching, the course specifically includes watching a series of popular science films, tracking the growth stories of outstanding young alumni, and sharing experiences of social practice after each lecture.
The “joint lecture” hyped by the report to represent the “numerous interactions at the level of leading personnel” between the Wuxi Group and the PLA is simply two Tsinghua alumni invited to give one lecture, as part of a series of lectures, to Tsinghua students, because the two lecturers work on biotechnology and are very good at it, and comes from industry and academia, respectively.
2. Science award for public health distorted for PLA links
WuXi AppTec has presented awards to researchers from PLA AMMS for their research contributions
The “awards” in question is 药明康德生命化学研究奖 WuXi AppTec Life Science and Chemistry Award. Its official description says
The "WuXi AppTec Life Science and Chemistry Research Award" was established in 2007 with the aim of recognizing outstanding students and young scientists in the fields of chemistry, life sciences, medicine, pharmacy, and related technologies who have made outstanding achievements in scientific research innovation, results promotion, and high-tech industrialization.
Since its establishment, the WuXi AppTec Life Science and Chemistry Research Award has been successfully held for fifteen consecutive sessions. The scope of the award has expanded from a single field to comprehensively cover various fields of pharmaceutical research and development, including chemistry, biology, pharmacology, toxicology, pharmaceutical science, new drug clinical development, clinical medicine, translational medicine, genomics, bioinformatics, and the combined application of medical and artificial intelligence.
287 outstanding scientists have been awarded the "WuXi AppTec Life Science and Chemistry Research Award." 27 have been elected as academicians of the Chinese Academy of Sciences and the Chinese Academy of Engineering. The youngest awardee received the prize at the age of 29.
I’ve gone through all the winners and counted three affiliated with PLA AMMS (People’s Liberation Army Academy of Military Medical Sciences), as noted by Mulvenon’s report, representing 1% of the winners.
[The names of all winners from 2007 through 2017, as well as 2019, are available here. 2018 is available here. 2020 is available here. 2021 is available here. 2022 is available here. The award wasn’t presented in 2023.]
On the work of the three winners affiliated with the PLA
In December 2018, the award was presented to Professor 秦成峰 Qin Chengfeng, for being
秦成峰教授率先分离获得中国首株寨卡病毒,证实患者尿液中存在感染性病毒。他还揭示了寨卡病毒单氨基酸突变导致小头畸形的分子机制,为科学应对今年由寨卡病毒引起的全球公共卫生危机提供了依据
the first to isolate the first strain of the Zika virus in China, confirming the presence of infectious virus in the patient's urine. They also revealed the molecular mechanism of Zika virus single amino acid mutation leading to microcephaly, providing a basis for scientific response to this year's global public health crisis caused by the Zika virus.
Qin’s research immediately before December 2018 includes
A single mutation in the prM protein of Zika virus contributes to fetal microcephaly, Science, September 2017
Intranasal infection and contact transmission of Zika virus in guinea pigs, Nature Communications, November 2017
Development of a chimeric Zika vaccine using a licensed live-attenuated flavivirus vaccine as backbone, Nature Communications, February 2018
Treatment of Human Glioblastoma with a Live Attenuated Zika Virus Vaccine Candidate, mBio (bimonthly peer-reviewed open access scientific journal published by the American Society for Microbiology), September 2018.
In 2010, the award was presented to 17 people, including a Level III award to 谢蓝 Xie Lan of PLA AMMS, for the discovery and optimization of novel lead compounds against HIV. [Xie is well-published on HIV in English.]
In 2008, in the second year of the award, 王全军 Wang Quanjun, then of PLA AMMS [He has since joined Suzhou Institute of Materia Medica and SAIFU Laboratories, two civilian entities], became one of twelve winners all working on preclinical pharmacology and toxicology of drugs, the theme of the award that year.
The press release at the time made clear that the decision was based on submitted papers [参选论文]. I can’t find Wang’s submitted paper, but
his publications before 2008 include Application of proteomics in pharmacological toxicology (2003), Application of toxicology microarray technology in pharmacological toxicology (2003), Progress in research of metabonomics (2004), and New technologies and methods in pharmacological toxicology research (2007).
The report pointed to these 3 people but failed to inform readers that they, well-published scientists studying diseases and cures, are among 287 winners of a public, well-known award run by Wuxi to pay tributes to scientific progress.
and in recent years its management committee has included representatives from PLA AMMS, the Fourth Military Medical University (第四军医大学), which is known to carry out military biological warfare research, and the Chinese Academy of Sciences, which is heavily involved in dual-use science and technology research. [38]
The WuXi AppTec Life Science and Chemistry Research Award has one management committee [管理委员会] and one committee of judges [常务评审委员会], according to information from 2007 and 2018.
Information about its management committee is lacking, except that Xu Guanhua, China’s former Minister of Science and Technology, served as chair of the committee in 2007, and Dr. Jian Li 黎健, Deputy Director of New Drug Research and Development Services at Wuxi AppTec Life, served as Secretary-General of the committee in 2018.
Information about its committee of judges, on the other hand, is known extensively. A Baidu Baike, China’s Wikipedia wannabe, page includes the names of its judges from 2007 to 2017, and they include who Mulvenon’s report says from PLA AMMS, the Fourth Military Medical University, and the Chinese Academy of Sciences. Therefore, Mulvenon almost certainly made a factual error by mistaking the panels of judges for a management committee.
Also taking into consideration the judges for 2022 (I can’t find the names of the judges between 2018 and 2021), there are 128 person-times of judgeship, including 9 person-times from the PLA AMMS and the Fourth Military Medical University, as noted by Mulvenon’s report, representing 7%.
The Fourth Military Medical University’s Chen Zhinan 陈志南 served six times as a judge. PLA AMMS‘s Zhang Yongxiang 张永祥, Liao Mingyang 廖明阳, and 张学敏 Zhang Xuemin each served once as a judge.
Chen, Zhang Yongxiang, Liao, and Zhang Xuemin all publish extensively in peer-reviewed academic journals, with the links pointing to papers under their names within the database of the National Center for Biotechnology Information of the National Library of Medicine, run by the U.S. National Institutes of Health.
Mulvenon says the Fourth Military Medical University “is known to carry out military biological warfare research” and provides zero evidence. [The linked page in Footnote 38 didn’t make such an accusation.]
For the sake of argument and depending on the definition of “military biological warfare research,” even if the university does, there is no evidence that Chen Zhinan was involved, plus that his role in the Wuxi award was merely judging who should win.
That logic applies to Zhang Yongxiang, Liao, and Zhang Xuemin of PLA AMMS, an institution Mulvenon didn’t accuse of improper conduct, as well as to scientists affiliated with the Chinese Academy of Sciences (CAS), the premier academic institution for scientific research and innovation in China that has played a pivotal role in advancing scientific knowledge and technological innovation within China and globally. CAS encompasses a vast network of research institutes, universities, and enterprises covering a wide array of scientific disciplines.
The report mistakes judges for management of a decade-long public award honoring significant contributions to scientific advancement, and didn’t provide any evidence of wrong-doing of its imputations.
By the way, notices for applying to the awards, in 2007 [1] [2] and 2020, say
评奖范围不涉及国防秘密和国家安全相关的人才、技术和项目
The scope of the evaluation does not involve talents, technologies, and projects related to national defense secrets or national security.
likely following - as a matter of fact, an expansion of - the regulation by China’s Ministry of Science and Technology that governs non-governmental awards, which says they must
确保不得受理涉及国防、国家安全领域的保密项目及其完成人参评社会科技奖 Ensure that confidential projects in the fields of national defense and national security, as well as the individuals involved in their completion, are not accepted for consideration in the evaluation of social science and technology awards.
So the Wuxi award by its own rules can’t have anything to do with defense secrets or national security.
WuXi Group scientists have also conducted joint academically published scientific research with the PLA’s 2nd Military Medical University and No. 401 Hospital.[39]
Footnote 39 includes two published papers from 2016 as if Wuxi should be tainted by them.
I do not pretend to understand what the two papers say, but their abstracts are pasted below so you may gauge if they should constitute risks for U.S. national security.
Investigation and resolution of incurred sample reanalysis failures in LC-MS/MS bioanalysis in Chinese Journal of Pharmaceutical Analysis, 2016
Abstract:
Incurred Sample Reanalysis (ISR), now widely applied in regulated bioanalytical laboratories, serves as a measure of the reproducibility, robustness, and accuracy of bioanalytical methods. Despite an average ISR success rate of 95% or higher and an increasing number of ISR tests in LC-MS/MS assays, there is a growing need for scientific evaluation or investigation of unmatched reassay results to determine the cause. This thesis aims to classify the factors in ISR failure investigations for small molecule medicines in terms of drug/metabolite instability, human error, sample processing, and method error. Five case studies are described where incurred sample reanalysis failures were encountered. Various approaches, including cause identification, ISR reanalysis, document investigation, and group discussion, are listed to elucidate the failure. Additionally, remedial actions proposed include regulatory compliance bioanalysis, thorough study of the analyte, and application of real samples in stability determination. Finally, the future perspective of ISR is discussed.
Keywords:
bioanalysis; incurred sample reanalysis (ISR); failure investigation; solution project; quantification reproducibility; small molecule medicines; regulatory compliance bioanalysis; LC-MS/MS
The determination of aldehyde disinfectants residual on the surface of endoscopes, in Chinese Journal of Disinfection, 2016
Abstract:
Objective: To establish a method for determining residual aldehyde on endoscope surfaces.
Methods: The high-performance liquid chromatography method was employed to test residual aldehyde disinfectants on endoscope surfaces.
Results: The linear range of residual 1,2-Benzendicarboxaldehyde was determined to be 50.36–251.80 μg/ml, with an r-value of 0.9991. The average recovery rate was 99.05%, with a standard deviation of 1.93%. The residual amount of 1,2-Benzendicarboxaldehyde after disinfection was ≤0.50 μg/ml. The linear range of residual glutaraldehyde was determined to be 5.00–25.00 μg/ml, with an r-value of 0.9925. The average recovery rate was 99.04%, with a standard deviation of 1.97%. The residual amount of glutaraldehyde after disinfection was ≤100 μg/ml.
Conclusion: High-performance liquid chromatography can be used to determine aldehyde disinfectant residues after the sterilization of medical apparatus and instruments. The method is accurate, sensitive, and highly specific.
Keywords: aldehyde disinfectants; endoscope disinfection; residues; HPLC; determination
It’s worth mentioning that in the U.S., civilian scientists, including those working at for-profit companies, also “conducted joint academically published scientific research” with the U.S. military.
Just to give you are few examples found randomly online, these are papers between military and corporate researchers [1] [2] [3][4] [5] and these are papers between military and civilian university researchers [1] [2] [3] [4].
This range of military-focused personnel serving on WuXi Group management committees suggests at least some degree of civil-military fusion in the company’s research and development activities. [40]
The inaccurate phrasing “Wuxi Group management committees,” while could be just a typo, omits the keyword “award,” and thus could mislead readers to believe “military-focused personnel” serve on the management of the Wuxi Group.
And just look at the wording “suggests at least some degree of.” I will say no more.
3. Initiative on tackling diseases twisted for unsubstantiated military use
WuXi Group executives have also been brought into broader government initiatives featuring military personnel and likely dual-use objectives. Through the “Major New Drug Creation Initiative” (新药重大创制”科技重大专项) within the Thirteenth Five-Year Plan, WuXi AppTec Deputy CEO Chen Shuhui (陈曙辉) was appointed in 2016 to the Initiative’s core committee where he served with representatives of the Fourth Military Medical University, the Military Medical Science Academy’s Institute of Pharmacology and Toxicology (军事医学科学院毒物药物研究所), and the Chinese Academy of Sciences. The committee’s aim is to grow China’s pharmaceutical research and development ecosystem across all stages of development, and the representatives chosen for the committee strongly indicates that it oversees dual-use range research and development activities. [41]
Dr. Chen Shuhu was indeed appointed in November 2016 to the “Major New Drug Creation Initiative” core team, which has 28 members, including one 陈志南 from the Fourth Military Medical University, one 张永祥 from the PLA AMMS Institute of Pharmacology and Toxicology, and three Academicians of the Chinese Academy of Sciences.
According to a governmental press conference in February 2017, which is three months later, the initiative “targets ten major diseases such as malignant tumors.” [新药专项总体目标是针对恶性肿瘤等10类(种)重大疾病]
According to the governmental regulation governing the initiative, the ten major diseases are “malignant tumors, cardiovascular and cerebrovascular diseases, neurodegenerative diseases, diabetes, psychiatric disorders, autoimmune diseases, drug-resistant pathogen infections, pulmonary tuberculosis, viral infections, as well as other common and prevalent diseases” [恶性肿瘤、心脑血管疾病、神经退行性疾病、糖尿病、精神性疾病、自身免疫性疾病、耐药性病原菌感染、肺结核、病毒感染性疾病以及其他常见病和多发病等] because they “seriously threaten the health of our nation’s people." [严重危害我国人民健康]
Let me put it this way: Moderna, Sanofi, GlaxoSmithKline, and other private companies took part in U.S. government-initiated Operation Warp Speed, where the Department of Defense is also a part, to develop COVID-19 vaccines. Should these companies somehow be tainted? And the paragraph merely says WuXi AppTec Deputy CEO Chen Shuhui was a committee member.
And just by the way, better drug-making also helps people outside China, including in the U.S. A February 2017 governmental press conference also mentioned that “One of the key tasks of the major new drug creation initiative during the ‘Thirteenth Five-Year Plan’ period is to ensure that innovative drugs in our country successfully enter the international mainstream market while meeting the medication needs of the people.” [使我国家的创新药物在满足人民用药需求的前提下,进一步成功进入国际主流市场,这是重大新药创制专项“十三五”的重点任务之一]
A governmental press briefing on the initiative in 2019 reports ”As of the end of 2018, more than 280 generic drugs have been registered in Europe and the U.S. Twenty-nine varieties supported by the Initiative have been approved for market in developed countries in Europe and the U.S, and twenty-three formulation varieties as well as four vaccine products have received WHO prequalification. Over 100 innovative drugs are undergoing clinical trials in Europe and the U.S, and a number of independently developed new drugs and high-end formulations are entering the international market.” [截至2018年底,累计超过280个通用名药物通过欧美注册。29个专项支持品种在欧美发达国家获批上市,23个制剂品种以及4个疫苗产品通过了WHO预认证,100多个创新药物正在开展欧美临床实验,一批自主研发的新药及高端制剂走向国际。]
Regarding the last sentence here, again, the wording “likely dual-use objectives” and “strongly indicates” betrays his evidence-free speculation.
The report ignores the initiative’s crucial task of treating diseases in China, of 1.4 billion people, and abroad, paints it solely as some sort of industrial policy, and asserts, without any evidence, that the initiative could be for military use.
4. Mutual funds for mom-and-pop investors mistaken for state subsidy
The WuXi Group’s funding streams are also intertwined China’s broader Military-Civil Fusion development strategy. They have received investment from the “Aviation Industry Corporation of China Military-Civil Fusion Selected Hybrid Securities Investment Fund” (中航军民融合精选混合型证券投资基金), which was explicitly set up to invest in enterprises engaged in military production.[42] Additional PLA-linked investment funds that have funded WuXi Group companies include the Changxin National Defense Fund (长信国防军工量化灵活配置混合型证券投资基金) and the CSI Military Industry Securities Investment Fund (申万菱信中证军工指数分级证券投资基金) among a range of others. [43] While the WuXi Group’s precise involvement in military production activities is not known, this range of military-focused investment underscores the firm’s importance to the PLA’s broader ambitions to integrate military capabilities with civilian biotechnology advancements. [44]
I’ve covered this part at the beginning, but here is a more detailed breakdown.
All three investment funds listed in the report are mutual funds, and for those who don’t know, Charles Schwab says:
What is a mutual fund?
Mutual funds let you pool your money with other investors to "mutually" buy stocks, bonds, and other investments.
1. They're run by professional money managers who decide which securities to buy (stocks, bonds, etc.) and when to sell them.
2. You get exposure to all the investments in the fund and any income they generate.
3. They offer a wide variety of investment strategies and styles.
In short, the mutual funds, dealing with publicly-traded stocks in the stock exchange, are not run by the state, and their money does not come from the government, state-owned enterprises, or any government initiative.
According to an annual industry report published in March 2024, the source of money for China’s mutual funds in 2022 comes overwhelmingly from individuals, NOT institutions. As shown below, 51.87% (in blue) is directly from individuals, and the rest [in red, dark blue, green, dark blue, and yellow] still mostly comes from “asset management products” 资管产品 sold to individuals.
The “military” in the name of the funds is chosen by the respective money managers because they think they can attract investors to pool enough money to buy and sell related stocks and make money from the transactions. Similar mutual funds are widely available across the world.
The debunk should end here because the three mutual funds are not state- or military-run, but mom-and-pop money. But just out of curiosity - how did the three mutual funds invest in Wuxi?
Mutual funds make significant disclosures about the stocks they hold. On the “Aviation Industry Corporation of China Military-Civil Fusion Selected Hybrid Securities Investment Fund” (中航军民融合精选混合型证券投资基金), the first fund named in the report, Wuxi was featured only once in its quarterly reports - in Q2 2019, when the money manager devoted 5.2% of the entire fund to the pharmaceutical company - at an amount of 1.34 million yuan, or 185,000 USD.
And the money didn’t go to Wuxi, but to other investors owning, in the stock exchange, Wuxi shares. Starting Q3 2019, Wuxi vanished from the fund’s holding, meaning even if you have been misled by the report to believe the Chinese government or military ever ran that fund to help Wuxi, the amount was just 185,000 USD and the duration was less than one quarter.
Even more ridiculous is the situation with the two other funds - also mutual funds - that the report named, the Changxin National Defense Fund (长信国防军工量化灵活配置混合型证券投资基金) and the CSI Military Industry Securities Investment Fund (申万菱信中证军工指数分级证券投资基金).
Footnote 43 on Page 14 includes the link to the 无锡药明康德新药开发股份有限公司首次公开发行股票发行公告 Initial Public Offering and Listing Announcement of WuXi App Tec
The IPO announcement lists 4,956 applicants to buy the Wuxi App Tec’s shares in the IPO round, and the two mutual funds are among them. Because the shares of Wuxi App Tec were oversubscribed (the demand for a new issue of stock is greater than the number of shares available), the applicants, including the two mutual funds, only got a small fraction of what they wanted.
A public disclosure by Wuxi App Tec showed they each got allocated 4,741 shares at the price of 21.6 yuan per share. That’s 102,189.6 yuan, or 14,400 USD.
Another way to think about it: the two funds applied to buy 3 million shares each of Wuxi App Tec during the IPO. If the all-powerful Chinese state or military really wants these two funds to help the company, how come they ended up just being allocated 4,741 shares respectively? [The fact is they are at least 90% owned by individuals, respectively, according to disclosures 1 and 2.]
Again, as mutual funds, the Changxin National Defense Fund (长信国防军工量化灵活配置混合型证券投资基金) and the [Shenwan Linxin] CSI Military Industry Securities Investment Fund (申万菱信中证军工指数分级证券投资基金) disclose their holdings.
Wuxi App Tec completed its IPO in Shanghai on May 8, 2018. Public disclosures in Q2 2018 by “Changxin National Defense Fund” and “CSI Military Industry Securities Investment Fund” showed neither held Wuxi shares at the time, meaning they had sold their shares.
In summary, even if one doesn’t know how mutual funds work, one could have calculated, based on public information, actual investments made by the three non-governmental, commercially-driven, professional managers-run pool of mom-and-pop money amounted to $185k, $14.4k, and $14.4k each. And that each of the investments lasted for less than one quarter.
5. Old wine in a new bottle
In fact, The entire The WuXi Group’s Ties to the People’s Liberation Army and China’s Military-Industrial Complex section was recycling part of a Jamestown Foundation’s China Brief in February 2024 by Sunny Cheung, Arran Hope, and Peter Mattis. Mulvenon quoted the China Brief piece three times in three footnotes and mentioned it once in the main text, but not acknowledging he appropriated an entire section with only minor changes.
My criticism of the section of Mulvenon’s report also applies to the section in the China Brief piece.
6. Last but not least
Mulvenon’s call for a “forced divestment in the name of U.S. national security interests” compared with other Chinese companies, is extraordinarily reckless for two reasons:
It’s disproportionate.
While one could argue a short-video platform doesn’t bring much net benefit to society at large and other tech companies theoretically could fill the void, so banning it doesn’t exactly result in significant losses, Wuxi is in fact infrastructure for life-saving medicine in the U.S., which is “already struggling with widespread drug shortages now at a 20-year high,” according to The New York Times report. “By one estimate, WuXi has been involved in developing one-fourth of the drugs used in the United States.”
It would represent an erosion of one of the final few fields of cooperation between China and the U.S.
Climate change and public health are perhaps the only remaining areas of common action. President Joe Biden said the U.S. “stands ready to work together” with China on “health security” in his meeting with Chinese President Xi Jinping in November 2023. If a company that helps develop badly-needed drugs can’t be exempted from attacks, how does that bode for the future?
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