Updated Jul 20, 2020 - World

Chinese biotech giant's U.S. subsidiary returns PPP loan after Axios story

A coronavirus test lab in Beijing, operated by BGI Genomics.

Chinese biotech company BGI Genomics provided mobile labs for conducting COVID-19 tests at a sports center in Beijing. Photo credit: Xinhua/Chen Zhonghao via Getty Images.

A U.S. subsidiary of Chinese genomics company BGI Group received a loan through the Paycheck Protection Program (PPP), according to data on the program released by the U.S. Treasury Department.

Update: The company announced on July 17 that it had returned the loan after Treasury "issued new guidance clarifying that the loans were not intended for companies with access to the equity market."

"BGI aims to do the right thing. BGI Americas’ business is managing under these difficult circumstances, and does not want to distract from the U.S. government’s need to prioritize recipients when funds are limited and other small businesses are in greater need. We remain fully committed to protecting the jobs of our U.S. employees.
BGI press release

Why it matters: BGI's close ties to the Chinese government, which is constructing a massive genetics database of its population, have raised concerns among U.S. officials.

Driving the news: PPP recipients came under scrutiny amid criticism that the program did not efficiently direct loans to the small business owners most in need of assistance during the pandemic.

Details: BGI Americas Corporation received a loan amount between $350,000 and $1 million.

  • The PPP program permitted U.S. subsidiaries of foreign companies to apply for loans under some conditions.

What they're saying: "BGI Americas’ U.S. business has been negatively impacted by the pandemic. BGI Americas is using the loan to help cover salaries and prevent layoffs of U.S. employees," a BGI Americas spokesperson told Axios.

Background: BGI Group is one of the largest gene sequencing companies in the world.

  • Amid rapidly rising coronavirus cases earlier this year, California rejected proposals from CGI, a U.S. subsidiary of BGI, to build coronavirus testing labs in the state.
  • U.S. officials are worried that state-connected companies such as BGI could use widespread coronavirus testing to compile massive DNA databases for research and genetics-based surveillance, Axios reported in June.
  • BGI has also said it is building a gene bank in Xinjiang, a northwestern region in China where the Chinese government is currently engaged in cultural and demographic genocide against local ethnic groups and where Chinese police have explored the use of genetic surveillance of minorities.

Go deeper: Chinese coronavirus test maker agreed to build a Xinjiang gene bank

Editor's note: This story has been updated to show that BGI returned its PPP loan after coverage by Axios.

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