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  • Prime editing devised by researchers at the Broad Institute led by David Liu is a significant advance of the original CRISPR gene editing tool discovered in 2012
  • CRISPR can cut and edit your DNA to correct defects inside your body’s cells to prevent and heal a range of incurable diseases and has revolutionized biomedicine
  • The original CRISPR is fraught with inaccuracies referred to as off target effects
  • Prime editing substantially reduces CRISPR’s off target effects and has the potential to correct up to 89% of known disease-causing genetic variations
  • CRISPR also has the capacity to edit genes in an embryo in such a way that the change is heritable
  • In 2018 Chinese researcher He Jiankui “created” the world’s first CRISPR babies
  • This triggered international criticism from scientists and bioethicists
  • A principal concern is that CRISPR is easy-to-use, cheap, regularly used in thousands of laboratories throughout the world and there is no internationally agreed and enforceable regulatory framework for its use
 
For better or worse we all now live in CRISPR’s world
 
In 2012 the world of biomedicine changed when a revolutionary gene editing technology known as CRISPR-Cas9 (an acronym for Clustered Regularly Interspaced Short Palindromic Repeats) was discovered. The technology harnesses your body’s naturally occurring immune system that bacteria use to fight-off viruses and has the potential to forever change the fundamental nature of humanity. Since its discovery CRISPR has been developing at lightning speed primarily because it is simple and affordable and today is used in thousands of laboratories throughout the world.
 
In this Commentary
 
In this Commentary we describe prime editing, which is the latest advance of the CRISPR's tool box, devised bya team of researchers, led by Andrew Anzalone, a Jane Coffin Childs postdoctoral fellow from the Broad Institute of MIT and Harvard and published in the October 2019 edition of Nature. Prime editing is significant because it provides a means to eliminate the unintentional consequences of CRISPR and therefore bring the technique closer for use in clinics. But this is still a long way off.
 
We also review a case where an ambitious scientist “created” the first CRISPR babies. This immediately triggered international criticism and a call for tighter regulatory control of the technology. Scientists and bioethicists are concerned that CRISPR can easily be used to create heritable DNA changes, which ultimately could lead to ‘designer babies’.
 
These two accounts of CRISPR might seem “opposites” and not sit well together in a single Commentary. Notwithstanding, what prompted putting them together was John Travis, the News Managing Editor of the well-known scientific journal Science, who soon after CRISPR’s discovery in 2012  said, “For better or worse we all now live in CRISPR’s world”
 
CRISPR and your DNA

CRISPR is different to traditional gene therapy, which uses viruses to insert new genes into cells to try and treat diseases and has caused some safety challenges. CRISPR, which avoids the use of viruses, was conceived in 2007 when a yogurt company identified an unexpected defence mechanism that its bacteria used to fight off viruses. Subsequent research made a surprising observation that bacteria could remember viruses. CRISPR has been likened to a pair of microscopic scissors that can cut and edit your DNA to correct defects inside your body’s cells to prevent and heal a range of intractable diseases. The standard picture of DNA is a double helix, which looks similar to a ladder that has been twisted. The steps in this twisted ladder are DNA base pairs. The fundamental building blocks of DNA are the four bases adenine (A), cytosine (C), guanine (G) and thymine (T). They are commonly known by their respective letters, A, C, G and T. Three billion of these letters form the complete manual for building and maintaining  your body, but tiny errors can cause disease.  For example, a mutation that turned one specific A into a T results in the most common form of sickle cell disease.
 
The original CRISPR
 
The original CRISPR tool, which is the first and most popular gene editing system, uses a guide RNA (principally a messenger carrying instructions from your DNA for controlling the synthesis of proteins) to locate a mutated gene plus an enzyme, like Cas9, to cut the double-stranded gene helix and create space for functioning genes to be inserted. However, a concern about CRISPR is that the editing could go awry and cause unintended changes in DNA that could trigger health problems. Findings of a study published in the July 2018 edition of  the journal Nature Biotechnology found that such inaccuracies, referred to as off-target effects, were substantially higher than originally reported and some were thought to silence genes that should be active and activate genes that should be silent. These off-target effects, such as random insertions, deletions, translocations, or other base-to-base conversions, pose significant challenges for developing policy associated with the technology.

Subsequently however, the paper was retracted, and an error correction was posted on a scientific website. Contrary to their original findings, the authors of the Nature Biotechnology paper restated that the CRISPR-Cas9 gene editing approach, "can precisely edit the genome at the organismal level and may not introduce numerous, unintended, off-target mutations".

 
Base editing

Notwithstanding, researchers remained concerned about CRISPR’s off target effects and several devised a technique, referred to as base editing, to reduce these. Base editing is described in three research papers published in 2017: one in the November edition of the journalProtein and Cell’, another in the October edition ofSciencethe and a third by researchers from the Broad Institute, in the October edition of the journal Nature’. Base editing takes the original CRISPR-Cas9 and fuses it to proteins that can make four precise DNA changes: it can change the letters C-to-T, T-to-C, A-to-G and G-to-A. The technique genetically transforms base pairs at a target position in the genome of living cells with more than 50% efficiency and virtually no detectable off-target effects. Despite its success, there remained  other types of point mutations that scientists wanted to target for diseases.

 

Prime editing
 
Prime editing is different to previous gene editing systems in that it uses RNA to direct the insertion of new DNA sequences in human cells. According to David Liu,  the senior author of the 2019 Nature paper and a world renowned authority on genetics and next-generation therapeutics, “a major aspiration in the molecular life sciences is the ability to precisely make any change to the genome in any location. We think prime editing brings us closer to that goal”.  Because prime editing provides a means to be more precise and more efficient in editing human cells in a versatile way, which eliminates many of CRISPR’s unintentional errors, it significantly expands the scope of gene editing for biological and therapeutic research.
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There are around 75,000 different mutations that can cause disease in people and prime editing has the potential to correct up to 89% of known disease-causing genetic variations. According to Liu, "Prime editing is the beginning, rather than the end, of a long-standing aspiration in the molecular life-sciences to be able to make any DNA change in any position of a living cell or organism, including potentially human patients with genetic diseases". Liu’s team at the Broad Institute intends to continue optimizing prime editing. In their October 2019 Nature paper researchers reported that they can precisely correct mutant genes, which cause sickle cell anaemia and Tay Sachs disease.
 

Sickle cell anaemia and Tay Sachs
 
Sickle cell anaemia is an inherited form of anaemia. This is when there are not enough healthy red blood cells  (haemoglobin) to carry adequate oxygen throughout your body. The condition is the most common inherited blood disorder in the US, affecting 70,000 to 80,000 and further it is estimated  each year some 300,000 babies are born with the disorder worldwide. Tay-Sachs disease is a rare and fatal nerve condition often caused by the addition of four extra letters of code.  Although anyone can be a carrier of  the disease it is much more common among people of Ashkenazi (Eastern European) Jewish descent. In the Ashkenazi Jewish population, the disease incidence is about 1 in every 3,500 new-borns and the carrier frequency is 1 in every 29 individuals.

 
Some moral and ethical implications of CRISPR
 
Being able to modify your DNA with CRISPR tools has transformed scientific research and is revolutionising medicine although it will be some time before the technology is regularly used in clinics. In addition to its potential benefits there are significant moral and ethical challenges associated with the technology, especially when it is used for germline engineering, which is the process by which your genome is edited in such a way that the change is heritable. Inappropriate use of germline editing could dent the progress of the CRISPR technology.
 
The first CRISPR babies
 
One well publicized  inappropriate use of CRISPR is a team in China, led by He Jiankui of the Southern University of Science and Technology in Shenzhen, which in November 2018 “created” the first gene edited twins, known by their pseudonyms Lulu and Nana. He edited the twins’ cells to be immune to HIV infection when they were embryos, therefore ensuring that every cell in their bodies were changed, including their reproductive ones, which means their edited genomes can be passed on to their children and grandchildren, despite the fact that scientists cannot be sure what the long term effects of such lasting modifications might be. The twins are the first CRISPR babies and the first humans to have every cell in their body genetically modified using the technology.
 
In 2015 Chinese researchers were the first to edit the genes of a human embryo in a laboratory dish. Although the embryos did not go to term, the experiment triggered an international outcry from bioethicists, who argued that CRISPR should not be used to make babies. Notwithstanding, He Jiankui did just this.
 
He  employed CRISPR to alter a gene in IVF embryos to disable the production of an immune cell surface protein, CCR5, which HIV uses to establish an infection before insemination. CCR5 is a well-studied genetic mutation, and there is scientific and medical value in understanding how CRISPR can be used to disable and prevent HIV/AIDS. He believed that the use of CRISPR technology was medically appropriate and expected his experiment, “to produce an IVF baby naturally immunized against AIDS”. But more contentiously, He created twins who could pass the protective mutation to future generations. It is CRISPR’s ability to easily and cheaply edit human embryos, eggs, or sperm in order to create irrevocable changes and the potential for designer babies, which raises concerns.  
 
He defended his work at a Hong Kong genomics conference in late November 2018, but there was immediate and significant international criticism about the scientific and ethical legitimacy of his experiments, which broached China’s guidelines as well as international ethical and regulatory norms. A Chinese government investigation found He to have violated state law in pursuit of “personal fame and fortune”.  His endeavours cost him his university position and the leadership of a biotech company he founded, which had successfully raised US$43m start-up capital and was advised by Craig Melloprofessor  of the University of Massachusetts Medical School and Nobel Laureate for medicine in 2006 for his genetics research.
 
Opacity and scientific competition
 
Some scientists are reluctant to be critical of He and suggest his studies, which resulted in the first CRISPR babies,  simply signal the “next chapter in the technology’s story”. He Jiankui appears to be an ambitious scientist desperate to become the first to conduct the gene editing experiment on humans, but who made some significant errors of judgement by initiating his study prematurely and by withholding information from regulatory authorities and his university. A generous interpretation might suggest that He was motivated by science and humanity. Through a Beijing-based organization, which helps Chinese people with HIV, he recruited couples for his experiment where only the fathers were living with HIV infections, which they managed by antiviral drugs. Eight couples agreed to participate, although one subsequently withdrew.
 
Since He’s statement at the Hong Kong conference he has disappeared, but the background to his studies has been well documented. In late 2017, He, who specialized in sequencing DNA, began his efforts to produce human babies from gene edited embryos and before and during his study it is reported that he sought advice from international experts in the field and communicated openly with international colleagues about his plans. Notwithstanding, it is alleged that He faked a blood test for one of the fathers in the study, aware that in China the HIV status of the father would disqualify him from participating in fertility treatments. Also, He failed to appropriately inform the hospital where the twins were edited and implanted of the status of his experiments.

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Will China become a world leader in health life sciences and usurp the US?


 
Fierce competition among scientists is not uncommon and competition fuels opacity among scientists in their battle to become the first to make a discovery. Indeed, it is not uncommon for scientists to shield their ideas and research. This does not condone He’s actions, but it might help to explain them. Generally speaking, scientific opacity is not created by ambitious scientists alone, but it is partly created by scientific funding bodies and research institutions. Such opacity is a significant obstacle to open collaboration. In addition to wanting to be the first, He’s intentions might also have been an attempt to spare children of parents with HIV/AIDS  from inheriting the disease.
CRISPR is not yet safe
 
Be that as it may, many scientists agree that CRISPR is not yet safe and precise enough to be used in human embryos. In the March 2019 edition of Nature a group of 18 prominent CRISPR scientists and bioethicists from seven countries called for a global moratorium on heritable genome editing until the establishment of an international framework that would compel countries to establish both scientific safety and broad societal agreement before allowing the technology to progress.  "We call for a global moratorium on all clinical uses of human germline editing; that is, changing heritable DNA (in sperm, eggs or embryos) to make genetically modified children" , the scientists wrote.

Opposition to germline editing is mixed
 
However, opposition to germline editing is mixed. In February 2017 the US National Academies of Sciences, Engineering, and Medicine (NASEM) published a report, which did not call for an international ban of germline editing, but instead suggested that it "might be permitted" if strict criteria were met. In July 2018, the UK’s Nuffield Council of Bioethics published a report on heritable genome editing and suggested that under certain circumstances it could be morally permissible, even in cases of human enhancement. 

Given that CRISPR is cheap, easy-to-use and already an effective tool in thousands of laboratories throughout the world, it seems reasonable to assume that standards and laws are unlikely to prevent a determined scientist and desperate patients from using the technology prematurely. Indeed, science and medicine have a history of researchers attracting public criticism for undertaking experiments prematurely only to have those experiments become common medical practices: in-vitro fertilization  (IVF) is one such example. Although IVF has a chequered history today it accounts for millions of births worldwide and  1% to 3% of all births every year in the US and Europe.
 
Germline engineering and somatic genetic modification
 
Here we describe the difference between germline and somatic adjustments. The former uses CRISPR to modify DNA in such a way that the change is heritable. The latter uses CRISPR to modify the DNA of people with incurable diseases in a way that such modifications are limited to the people treated and not passed on to future generations. Broadly speaking, your body has two kinds of cells: somatic and germ cells. The vast majority are somatic. These cells make up your body and are responsible for forming all your familiar structures: such as your skin, blood, muscles and organs etc. Your somatic cells die when you die so there is no chance of them creating a new organism. However, germ cells are different. Early in your development your germ cells  are sequestered: they divide more slowly and under restricted circumstances. Germ cells cannot become a physical feature such as an ear or a finger, but they do make the only bits of you, which can form a new person: your eggs and your sperm. Every cell in your body holds your DNA in an unbroken lineage stretching back millions of years and thousands of generations, but only the germline has a chance to go forward. Human germline modification means deliberately changing the genes passed on to children and future generations and thereby creating genetically modified people. Somatic genetic modification is different. It adds, cuts, or changes the genes in some of your cells, typically to alleviate a medical condition. The use of human genome editing to make edits in somatic cells for purposes of treating genetically inherited diseases is already in clinical studies. If perfected, somatic gene editing (gene therapy) holds promise for helping people who are sick, affecting only an individual consenting patient. With the exception of He’s studies, human clinical studies with CRISPR have been limited to somatic cells. In effect, this renders CRISPR no more consequential than any other experimental drug or treatment. Any CRISPR-made somatic cell changes are a genetic dead-end and are not heritable. However, germline cells have the possibility of immortality, with the potential to affect thousands of people over the course of several generations. Tampering with germline cells is therefore a much more serious proposition.
 
Clinical studies of gene therapies
 
Gene therapy is primarily available in a research setting. The US Food and Drug Administration (FDA) has approved only a limited number of gene therapy products for sale in the US.According to the US National Institutes of Health, which serves as a clearinghouse for biomedical research worldwide, there are over 800 clinical studies currently underway to test gene therapy as a treatment for genetic conditions. The list includes a relatively small number of CRISPR studies as a treatment for cancers of the lung, bladder, cervix and prostate, the majority of which are in China where doctors appear to be leading the race to treat cancer by editing genes. For the past two decades China has been investing heavily in biomedicine. It is one way that China is able to compete with the West and demonstrate its technological prowess in the 21st century. Also, it is important for China to keep its vast population healthy in the 21st century. Given the somewhat ambiguous state of CRISPR technology it seems reasonable to assume that the first therapeutic applications of CRISPR will be in diseases where cells can be taken out of your body, edited, checked to ensure they are safe and then reintroduced. This suggests blood disorders such as sickle cell or thalassemia.
 
Takeaways
 
Bioethicist Henry T (Hank) Greely, professor at Stanford University, California, US, compares CRISPR to the Model T Ford, which was not the first automobile, but because of its simplicity of production, dependability and affordability it transformed society. CRISPR is not the first gene editing technology, but it is cheap and easy to use and is on the cusp of transforming biomedicine. A significant challenge is getting CRISPR tools, which are capable of performing gene edits, into the right place and to ensure they are safe. Prime editing is a smart, innovative and a substantial step forward in achieving this. Indeed, David Liu and his colleagues from the Broad Institute  have expanded the gene editing toolbox to facilitate ever-more precise editing ability and efficiency. Significantly, the overwhelming majority of human genetic disorders are due to the types of mutation that prime editing is able to correct, which stands the technique in good stead to be useful in therapies for intractable diseases. Notwithstanding, it is one thing to cut out sequences of DNA that cause genetic diseases and another to make genetic changes that are passed down to all later generations. Because CRISPR is cheap, easy-to-use, in the hands of scientists throughout the world, and already has been used to create babies with heritable traits, the technology provokes deep ethical and societal debate about what is, and what is not acceptable in efforts to prevent disease. Given that CRISPR has the potential to change the nature of humanity, it is incumbent on all citizens, not just scientists, bioethicists and regulators, to call for open and inclusive processes associated with all aspects of CRISPR.
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Will China become a world leader in health life sciences and usurp the US?
 
After World War II, the US captured the global lead from Europe in life sciences thanks to the large American domestic market, its strong network of university research laboratories, competent regulation, effective pricing regimens and generous federal R&D funding.
 
America’s leadership in life sciences is slipping
 
Over the past two decades, as China has systematically upgraded its economy from low-grade to high-grade production, it has come to realize the significance of the health life sciences and Beijing has become determined to win a larger share of the industry’s activity. During this time America’s leadership position in the life sciences industry has slipped.
 
  • Will China usurp the US and become a world leader in health life sciences?
  • What could the erosion of the life sciences industry mean for the US economy?
  • What can American life sciences corporations do to reduce or slow their market slippage?
 
Health life sciences
 
Health life sciences refers to the application of biology and technology to improve healthcare. It includes biopharmaceuticals, medical technology, genomics, diagnostics and digital health and is one of the future growth industries positioned to radically change the delivery of healthcare, substantially reduce the morbidity and mortality of a range of chronic and incurable diseases and save healthcare systems billions. The life sciences industry plays a key role in supporting the economies of the US and China as well as other nations and helps them to compete internationally. The sector requires a complex ecosystem, which integrates high-tech research, large, long-term investments of capital in the face of significant technological, market and regulatory risks, skilled labour, specific manufacturing skills, intellectual property (IP) protection and policy support. According to a 2019 Deloitte’s report on health life sciences the global market size of the industry is projected to grow from US$7.7trn in 2017 to US$10trn by 2022.
 
Reason’s for America’s slippage
 
America’s slippage in its life sciences industry is due to:
  • Increased fair competition from a number of nations, including the UK, and increased unfair competition from China who aggressively steals US IP to piggyback on American life-sciences innovations in order to benefit from enhanced therapies without having to pay their fair share for the costly R&D. China then uses its government’s monopsony power as a purchaser of life sciences offerings to limit the prices of US and other international firms
  • Recent US Administrations’ lukewarm support for the industry. Federal biomedical research funding has been cut in real terms. Reimbursement policies are changing to a value-based approach and pricing policies have tightened. Such policies create uncertainty regarding the government’s willingness to pay for future treatments and the research necessary to discover and bring them to market. The US is also falling behind in providing innovative tax incentives for the industry
  • American life sciences corporations’ reluctance and inability to adapt their strategies and business models to changing international markets.
 
Permanent economic damage
 
The Chinese competitive threat is real and significant. It is important for the US to maintain a competitive life-sciences sector since it generates high-skilled, high-paying jobs and its product offerings are sold throughout the world and the industry is a key component of the US traded economy. A weaker American competitive position in the life sciences could mean a lower value for the dollar, a larger trade deficit, plant closures and job losses. China and other nations, which are gaining global market share at the expense of the US, could cause significant damage to the American life-sciences industry.
 
Creating a health life sciences industry is challenging enough, recreating one after it has lost significant market share is even more challenging, if not impossible. We suggest that to reduce to possibility of this happening US life sciences corporations might consider changing the mindsets of their leaders and demonstrate a greater willingness to learn from and engage with Chinese start-ups, especially those in adjacent industries with AI and machine learning capabilities and experience. The cost of doing this will be to give up some IP, which might be worth doing given the potential financial benefits from such a strategy.

 
A “bullish” American perspective
 
The generally accepted Western perspective is that the US excels at visionary research and moon-shot projects and will always be the incubator for big ideas. The reasons for this include: (i) American education is open, encourages individuality and rewards curiosity and its universities have consistently produced vast numbers of innovative discoveries in the life sciences, (ii) American scientists have been awarded the majority of Nobel prizes in physiology/medicine, physics and chemistry, and (iii)  America is the richest nation in the world. This suggests that there are no apparent reasons why the US should not continue as a world leader in health life sciences.

By contrast, China has stolen and copied America’s intellectual property (IP) for years and is a smaller economy fraught with politico-economic challenges. Although China’s economic growth has lifted hundreds of millions of people out of poverty, China remains a developing country with significant numbers of people still living below the nation’s official poverty level. Beijing has challenges balancing population growth with the country’s natural resources, growing income inequality and a substantial rise in pollution throughout the country. Further, China’s educational system is conformists and not geared to producing scientists known for making breakthrough discoveries. This is borne-out by the fact that China only has been awarded two Nobel prizes for the sciences: one for physiology and medicine in 2015 and another for physics in 2009.

 
Copiers rather than inventors
 
Over the past four decades Chinese scientists, with the tacit support of Beijing, have aggressively and unethically stolen Western technologies and scientific knowhow. According to findings of a 2017 research report from the US Intellectual Property (IP) Commission entitled The Theft of American Intellectual Propertythe magnitude of "Chinese theft of American IP currently costs between US$225bn and US$600bn annually."

America’s response to China’s IP theft has been to adopt the moral high-ground, dismiss China as an unscrupulous nation not worthy of investment and focus on commercialising its discoveries with “single bullet” product offerings and marketing them in wealthy regions of the world, predominantly North America, Europe and Japan. Over the past decade, this strategy has been supported by a US Bull market in equities, which started in 2009, outpaced economic growth in most developed nations and led to a significant degree of satisfaction among C-suites and boards of directors of US life sciences corporations, which did not perceive any need to adjust their strategies and business models despite some market slippage and changing market conditions.

 
Confucian values support conformism rather than discovery
 
Although China has benefitted economically from the theft of American IP, the American view tends to be that China is unlikely to become a world leader in the life sciences because the nation has not produced a cadre of innovative scientists and its education system is unlikely to do so in the near to medium term. Chinese education encourages students to follow rather than to question. Indeed, Confucian values remain a significant influence on Chinese education and play an important role in forming the Chinese character, behaviour and way of living. Confucianism aims to create harmony through adherence to three core values: (i) filial piety and respect for your parents and elders, (ii)  humaneness, the care and concern for other human beings, and (iii) respect for ritual. According to Confucian principles, “a good scholar will make an official”. Thus, some of China’s best scientists leave their laboratories for administrative positions.
 
Further, Chinese universities tend to bind students to their professors who expect unquestioning loyalty. Scepticism towards generally accepted scientific theories is discouraged, especially when they are held by senior academics. Also, China unlike the US, does not tolerate “failure”, and this incentivises Chinese scientists to conduct “safe” research that yields quick and “achievable” outcomes. All these factors conspire to discourage high risk creative scientific activity and encourages safer, “copycat” research endeavours.
 
The strength of the US$ and the US economy
 
America’s global leadership in the life sciences is supported by the fact that the US is the world’s richest and most powerful nation. In nominal terms (i.e., without adjustment for local purchasing power) the US and China have GDPs of US$19trn and US$12trn respectively and  populations of 326m and 1.4bn. Further, the US has an “unrivalled” global trading position: the US dollar is the strongest currency in the world and dominates the overwhelming percentage of all international trade settlements: 70% of all world trade transactions are in US$, 20% in €’s and the rest in Asian currencies, particularly the Japanese ¥ and increasingly the Chinese ¥. Also, US dollar holdings make up the largest share of foreign exchange reserves and the effect of this is to maintain the high value of the US$ compared with other currencies and provide US corporations with significant profits, US citizens with cheap imports and the US government with the ability to refinance its debts at low interest rates.
 
An Asian context
 
We suggest that it is increasingly important for American health life science professionals to get a better understanding of China and Asia. The Asian perspective described here is drawn from three recent books: The New Silk Roads: The Present and Future of the World by Peter Frankopan, The Future is Asian by Parag Khanna and AI Super-Powers: China, Silicon Valley and the New World Order published in late 2018 by Kai-Fu Lee.  

Crudely put: the 19th century was British, the 20th century American and the 21st century is expected to be Asian. The era of breakthrough scientific discoveries and stealing American IP is over, and we have entered an “age of implementation”, which favours tenacious market driven Chinese firms. “Asians will determine their own future; and as they collectively assert their interests around the world, they will determine ours as well”, says Khanna. This is starkly different to American prognosticators who assume that the world will be made in the American image, sharing American values and economics.
Asian view of the US$

Some observers suggest that there are chips appearing in the giant US edifice of international trade described above. The current US Administration’s policies have triggered and intensified discussions in Europe and Asia about America’s dominant global economic position and suggest that the US$ might be starting to weaken against a basket of currencies as China, Russia, Iran, Turkey and other nations, choose to use local currencies for some international trade transactions, which they then convert into gold. Further, central banks are tightening their monetary policies and adjusting their bond purchasing strategies. A common US view is that such trading activities are so small relative to global US$ transactions they will neither weaken the US$ nor dent America’s pre-eminent global trading position.
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Notwithstanding, replacing the US$ with the Chinese ¥ seems to be part of Beijing’s long-term strategy, as Beijing encourages its trading partners to accept the ¥ as payment for Chinese exports. China’s recent trading agreements with Canada and Qatar for instance have been based upon local currencies rather than the US$. China, which is the biggest importer of oil, is preparing to launch a crude oil futures contract denominated in Chinese ¥ and convertible into gold. European, Asian and Middle Eastern countries have embarked on domestic programs to exclude the US$ from international trade transactions. Also, oil exporting countries are increasingly able to choose which currencies they wish to trade in. At the same time, oil-producing countries no longer seem so interested in turning their revenues into “petrodollars. For the past decade, President Putin of Russia has been calling for the international community to re-evaluate the US$ as the international reserve currency. All this and more suggests that increasingly, emerging economies may transition from their undivided dependence on the US$ for international trade settlement to a multipolar monetary arrangement. Whilst small relative to the full extent of global trade, it is instructive to view these changes within a broader Asian context.
 
The US has had little exposure to China and Asia
 
One outcome of America’s pre-eminent global economic position and the financial success of American life sciences companies is that corporate leaders and health professionals tend to have little or no in-depth exposure to Chinese and Asian culture and markets. For example, few Fortune 500 senior executives have worked in China; few American life sciences corporations have sought in-depth briefings of Asian markets and few US students and scientists have studied or carried out research in China. Instead, American life science corporate leaders tend to be US-centric; they condemn China for its IP theft and recommend not to invest in China because a condition of doing so is that you are obliged to part with some of your IP.
 
Asia a potential economic powerhouse
 
This distancing has resulted in life science professionals “misdiagnosing” China in a number of ways, which we will discuss. One misdiagnosis is to conflate China with Asia. Asia is comprised of 48 countries. East Asia includes China, Japan and North and South Korea. South Asia includes India, Pakistan and Bangladesh. South East Asia includes Indonesia, Malaysia, Philippines, Singapore and Thailand. These three sub-regions link 5bn people through trade, finance, infrastructure and diplomatic networks, which together represent 40% of the world’s GDP. China has taken a lead in building new infrastructure across Asia - the new Silk Roads - but will not necessarily lead this vast region alone. Rather, as Khanna reminds us, “Asia is rapidly returning to the centuries-old patterns of commercial and cultural exchanges, which thrived long before European colonialism and American dominance”.
 
The difference between IP theft and imitating ‘what works

Market driven Chinese start-ups, supported by the government, are expected to transform China into a world leader in health life sciences by 2030. The thing to understand about China is that it is not just a few start-ups that steal and copy American IP but thousands, which then aggressively compete. This entails cutting prices, improving and adapting their product offerings, developing leaner operations and aligning their strategies and business models to the demands of different markets. The vast scale of this activity has led to a unique cadre of über agile Chinese entrepreneurs, who imitate successful business models and then engage in value added culture-specific product development processes. This has led to Chinese companies becoming exemplary “market driven” implementors. By contrast American companies tend to be “mission driven” and operate a “single bullet” business model and are either slow or reluctant to adapt to the demands of different markets. This results in US discoveries being exploited in Asia by Chinese rather than American companies. We suggest that there are significant benefits to be derived from American life sciences companies developing joint ventures with market driven Chinese start-ups even if it means surrendering some IP.
 
As a postscript, it is worth pointing out that the first Chinese patent was only granted in 1985 and recently, after decades of widespread theft, IP protection in China has improved at lightning speed. As Chinese companies issue more patents, the keener they are to protect them. According to the World Intellectual Property Organization in 2017 China accounted for 44% of the world’s patent filings, twice as many as America.

 
US inventions exploited in Asia by Chinese start-ups
 
An illustration of a disruptive life science technology invented in the US but exploited faster and more extensively in China is CRISPR-Cas9 (an acronym for Clustered Regularly Interspaced Short Palindromic Repeats), which is generally considered to be the most important invention in the history of biology.  The initial discovery was made in 2012 by a collaboration between Jennifer Doudna, at the University of California, Berkeley, USA and French scientist Emmanuelle Charpentier. Applications of CRISPR technology are essentially as infinite as the forms of life itself. Since its discovery, modified versions of the technology by Chinese scientists have found a widespread use to engineer genomes and to activate or to repress the expression of genes and launch numerous clinical studies to test CRISPR-Cas9 in humans.
 
Virtuous circle
 
Notwithstanding, transforming CRISPR genomic editing technologies into medical therapies requires mountains of data and advanced AI capabilities. China has both. The more genomic data you have the more efficacious clinical outcomes are likely to be. The better your clinical outcomes the more data you can collect. The more data you collect the more talent you attract. The more talent you attract the better the clinical outcomes. China is better positioned than America to benefit from this virtuous circle. China’s less than stringent regulation with regards to privacy and storing personal data gives it a distinct competitive advantage over American and Western life sciences companies. China also has more efficient means than any Western nation for collecting and processing vast amounts of personal data.
 
Collecting personal data

Any casual visitor to China will tell you that one of the striking differences with Western nations is that the Chinese economy is cashless and card-less. Citizens pay for everything and indeed organise their entire lives with a mobile app called WeChat, a multi-purpose messaging, social media and mobile payment app developed by TencentWeChat was first released in 2011 and by 2018 it was one of the world's largest standalone mobile apps, with nearly 1bn daily users who every day send about 38bn messages. Not only is WeChat China's biggest social network it is also where people turn to book a taxi, hotel or a flight, order food, make a doctor’s appointment, file police reports, do their banking or find a date and has become an integral part of the daily life of every Chinese citizen. State-run media and government agencies also have official WeChat accounts, where they can directly communicate with users. Further, an initiative is underway to integrate WeChat with China’s electronic ID system. It may be hard for people outside of China to grasp just how influential WeChat has become. There is nothing in any other country that is comparable to WeChat, which captures an unprecedented amount of data on citizens that no other company elsewhere in the world can match. This represents a significant competitive advantage. Applying AI and machine learning technologies to such vast data sets provide better and deeper insights and patterns. These vast and escalating data sets, and advanced AI capabilities for manipulating  them, give China a significant competitive advantage in the high growth life sciences industry, which  increasingly has become digital.
 
 Processing personal data
 
AI is another example of  a technology invented in the West and implemented much faster in China. The “watershed” moment for China was in 2017, when AlphaGo became the first computer program to defeat a world champion at the ancient Chinese game of Go. Since then, China has been gripped by “AI fever”.

Until recently AI machines were not much better than trained professionals at spotting anomalies and mutations in assays and data. This changed in early-2,000 with the ubiquitous spread of mobile telephony and the confluence of vast data sets and the development of neural networks, which made the onerous task of “teaching” a computer rules redundant. Neural networks allow computers to approximate the activities of the human brain. So, instead of teaching a computer rules, you simply feed it with vast amounts of data and neural networking and deep learning technologies identify anomalies and mutations in seconds with exquisite accuracy.

The Beijing Genetics Institute

An illustration of the scale and seriousness of China’s intent to become a world-leader in life sciences and to eclipse similar initiatives by the US is the 2016 launch of a US$9bn-15-year national initiative to develop technologies for interpreting genomic and healthcare data. This national endeavour followed the launch in 1999 of the Beijing Genomics Institute (BGI), which today is a recognised global leader in next generation genetic sequencing. In 2010, BGI received US$1.5bn from the China Development Bank, recruited 4,000 scientists and established branches in the US and Europe. In 2016 BGI created the China National GeneBank (CNGB) on a 47,500sq.m site in Shenzhen, which benefits from BGI’s high-throughput sequencing and bio-informatics capacities. CNGB officially opened in July 2018 and is the largest gene bank of its kind in the world. Dozens of refrigerators can store samples at temperatures as low as minus 200 degrees Celsius, while researchers have access to 150 domestically developed desktop gene sequencing machines and a US$20m Revolocity machine, known as a “super­sequencer”. The Gene Bank enables the development of novel healthcare therapies that address large, fast growing and underserved global markets and to further our understanding of genomic mechanisms of life. Not only has CNGB amassed millions of bio-samples it has storage capacity for 20 petabytes (20m gigabytes) of data, which are expected to increase to 500 petabytes in the near future. The CNGB represents the new generation of a genetic resource repository, bioinformatics database, knowledge database and a tool library, “to systematically store, read, understand, write, and apply genetic data,” says Mei Yonghong, its Director.

US life sciences benefit by engaging with Chinese companies

Lee, in his book about AI, suggests that it is not so much Beijing’s policies that keep American firms out of the Chinese markets, but American corporate mindsets, which misdiagnose Chinese markets, do not adapt to local conditions and fail to understand the commercial potential of Chinese start-ups and consequently get squeezed out of the Chinese market.

This is what happened as Google failed to Baidu, Uber failed to DiDi, Twitter failed to Weibo, eBay failed to TaoBao, and Groupon failed to Meituan-Dianping. We briefly describe the demise of Groupon and point to lessons, which can be learned from it.
 
Lessons from Groupon’s failure in China

Groupon failed to adapt its core offering when group discounts in China faded in popularity and as a consequence it rapidly lost market share. Meituan, founded in 2010 as a Chinese copy of Groupon, quickly adapted to changing market conditions by extending its offerings to include cinema tickets, domestic tourism and more importantly, “online-to-offline” (O2O) services such as food and grocery delivery, which were growing rapidly.
 
In October 2015, Meituan merged with Dianping, another Chinese copy of Groupon, to become Meituan-Dianping the world's largest online and on-demand booking and delivery platform. The company has become what is known as a transactional super app, which amalgamates lifestyle services that connect hundreds of millions of customers to local businesses. It has over 180m monthly active users and 600m registered users and services up to 10m daily orders and deliveries. In the first half of 2018 Meituan-Dianping facilitated 27.7bn transactions (worth US$33.8bn) for more than 350m people in 2,800 cities. That is 1,783 enabled services every second of every day, with each customer using the company’s services an average of three times a week. Meituan-Dianping IPO’d in 2018 on the Hong Kong stock exchange and raised US$4.2bn with a market cap of US$43bn.
 
Efficiency also drives innovation. Meituan-Dianping’s Smart Dispatch System, introduced in 2015, schedules which of its 600,000 motorbike riders will deliver the millions of food orders it fulfils daily. It now calculates 2.9bn route plans every hour to optimize a rider’s ability to pick up and drop off up to 10 orders at once in the shortest time and distance. Since Smart Dispatch launched, it has reduced average delivery time by more than 30% and riders complete 30 orders a day, up from 20, increasing their income. In 2019, the American business magazine Fast Company ranked Meituan-Dianping as the most innovative company in the world.
 
Takeaways
 
Although Meituan-Dianping and other companies we mention may not be well known in the West and are not in the health life sciences industry, they are engaged in highly complex digital operations disguised as simple transactions, which enhance the real-world experiences of hundreds of millions of consumers and millions of merchants. To achieve this the companies have amassed vast amounts of data and have perfected AI and machine learning technologies, which make millions of exquisitely accurate  decisions every hour, 24-7, 365 days a year. Such AI competences are central to the advancement of health life sciences. American life science professionals might muse on the adage: “make your greatest enemy your best friend” and consider trading some of their IP to joint venture with fast growing agile Chinese data companies in a strategy to restore and enhance their market positions.
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