This report originally appeared in the April 2011 issue of DOTmed Business News

It’s common in policy circles to hear breathlessly hyped visions of China’s coming superpower role, spoken in a mixture of awe, fear and not a little schadenfreude (if the speakers are not American) or masochism (if they are). The few centuries of supremacy of the West, the story goes, are merely an interregnum, a historical anomaly, between periods of Chinese dominance. According to predictions by The Economist, for instance, China will surpass the United States to hold the title of the world’s biggest economy by about 2020.

The hype extends to China’s science, too. According to a 2008 Physics World article, the country now produces more scientific papers in physics than the United Kingdom and Germany. If the trend continues, next year it will surpass the United States in all scientific papers published.

One area where China particularly stands to dominate is in regenerative medicine and stem cell research. With extensive government backing, relatively open regulations and few ethical hang-ups over the issue, China is poised to take off as a major player in this field.

Various markers point to the country’s rise. As of 2009, China had 1,116 stem cell publications, almost as many as the United Kingdom, according to some accounts. And the country is putting its money where its mouth is, investing millions of dollars of public funds to develop stem cell laboratories and research projects.

China also generates an almost staggering amount of human capital, which is also being “invested” in this science. According to the Ministry of Science and Industry, there are about 400,000 graduates in science and medicine each year, with many presumably lured into stem cell research. These graduates in turn will be mentored by the force believed to be leading China’s stem cell surge – Chinese Diaspora researchers drawn home with the promise of well-funded labs.

But some skeptics believe the country’s science has been oversold, arguing that a peek behind the curtain often makes the numbers look less impressive. Those physics papers China cranks out? The average number of citations per article is a relatively lowly 4.12, with China ranking 65 in a world citation index, just above Kuwait, according to Physics World. For stem cell research, to truly succeed, China will likely have to crack down harder on a scandal that has long gnawed at the country’s reputation: the lightly regulated stem cell “clinic.”

Stem cells: the 150-cell controversy
Before diving into China’s role here, it’s worth getting a refresher course on what stem cells are, why they’re important, and who’s against this research.

Stem cells are to full-fledged adult cells what clay is to a ceramic pot: an unmolded, flexible instrument that can be turned to different uses. Stem cells, in the young embryo, are “pluripotent” or uncommitted, and can become a wide variety of cells, such as nerve cells, muscle cells and skin cells.

Although the field is often so puffed with hype it threatens to obscure serious research, the hope is that stem cells could one day be used to tackle some of medicine’s most insoluble problems. Proposed therapies include regrowing dopamine-producing neurons in the brains of Parkinson’s disease patients or creating clusters of insulin-manufacturing cells to implant into the pancreas of a diabetic.

Human embryonic stem cells, first isolated and grown in 1998, are typically derived from a 5-day-old embryo known as a blastocyst, which comprises only about 150 cells. Research on these very early-stage embryos, generally fertilized in vitro and donated from fertility clinics, has drawn the ire mostly from religious conservatives who believe it’s wrong to destroy human life, no matter if it has 100 cells or 100 trillion.

It’s important to note that no approved, scientifically validated therapy has been derived from embryonic stem cells, although a milestone was reached in 2009, when Menlo Park, Calif.-based biotech startup Geron Corp. received permission from the U.S. Food and Drug Administration to run human trials of its experimental therapy on patients with acute spinal cord injuries. (Some researchers are skeptical of this treatment and think this therapy, and the breathless press surrounding it, is a prime example of the field’s weakness for misleading hoopla.)

Adult or “somatic” stem cells, on the other hand, are ethically uncontroversial and have been used for over four decades in at least one form – bone marrow transplants. Scientists have also been able to genetically reprogram some adult cells, turning them into more flexible stem cells, called induced pluripotent stem cells. However, recent research has suggested that this process could potentially lead to dangerous mutations or abnormalities, although scientists are working to fix this or at least screen out the troublesome cells.

Sea turtles and the stem cell boom
Where does China come into this picture?

On the backs, some would say, of “sea turtles,” the nickname given to Chinese scientists who have studied or spent much of their life in leading institutions in Europe or North America, but who return home, lured by cultural and family ties, as well as the promise of good labs. (The name apparently comes from the similarity of the words “sea turtle” and “overseas returnee” in Chinese.)

“They really made up the backbone of the research being conducted in stem cells in China,” Dominique S. McMahon, a health policy researcher with the University of Toronto, told DOTmed News.

Recruiting Chinese researchers with international publications under their belts has been part of a government effort to raise the prestige and quality of its scientific research, McMahon said.

William Hoffman, a stem cell policy wonk who works at the University of Minnesota, said he knew a Chinese researcher, a “huge star” at Princeton, who returned to China to start up a lab.

“Being the magnet here for medical education is great, but the world’s changing,” said Hoffman, whose book The Stem Cell Dilemma, co-authored with Dr. Leo Furcht, has a new edition, which also tackles the “sea turtle” phenomenon, coming out later this year. “These students, they know when they go back home it won’t be quite like here. But they have financial means and the infrastructure to do what they couldn’t have done 15 years ago.”

“All of us who buy Chinese goods at Walmart, we’re setting up the stage here for quite a performance in the next number of decades,” he added.

Funding certainty, less burdensome licenses
One attraction of China is certainly the decent funding and lower labor costs that lead to cheaper labs. But another big lure could be a more relaxed regulatory environment and greater regulatory stability than in the United States, for example, where constantly shifting legislation and court rulings have jeopardized federal funding – which supplies the bulk of cash for basic research.

At press time, in fact, the U.S. industry was waiting to hear an outcome of a case that could deal a massive blow to domestic stem cell research.

To understand the somewhat precarious state of U.S. stem cell funding, a little history is in order. In August 2000, the Clinton Administration allowed federal funding of stem cell research for the first time, but no funding to create new embryonic stem cell lines. But this funding regime was never to be. Just one year later, before any grants actually could be doled out to scientists, a newly installed President Bush, apparently spooked by a reading of Aldous Huxley’s dystopian novel Brave New World, authorized funding only for the roughly 60 stem cell lines that had already been derived before 9 pm on August 9, 2001 – the time of his speech announcing the rule. Much grumbling from scientists and liberal editorial writers ensued until March 2009, when President Obama overturned most of the rule with an executive order.

Here, the struggle moved from the White House to the court house, as a lawsuit was filed against the Obama Administration, claiming the policy violated the Dickey-Wicker Amendment, a rider to a budget bill first passed in 1996 and renewed every year since then, which forbids federal funds to be used on research which destroys human embryos.

It was this lawsuit, filed actually by two adult stem cell researchers, that would make scientists sweat. That’s because on August 23, 2010, U.S. District Court Judge Royce Lamberth granted the request of the plaintiffs for an injunction stopping Obama’s new policy. As a result, the National Institutes of Health temporarily suspended funding and reviews of new human embryonic stem cell research proposals and cell lines.

True, a little over two weeks later, the U.S. Court of Appeals for the District of Columbia overturned the injunction, letting the NIH funding continue. But the final outcome – expected any day now – is anything but certain, “placing some scientists in the situation of checking the news each day to determine the legal status of their research,” according to Aaron D. Levine, a public policy researcher with the Georgia Institute of Technology in Atlanta, who has investigated the issue (and whose research into its history helped inform the previous summary).

Levine’s research also suggests this uncertainty seems to have had a fairly substantial impact on the U.S. industry, contrary to the opinion of Judge Lamberth. When granting the injunction, he argued that the adult stem cells researchers would be hurt by the added competition for federal funding, but that embryonic cell researchers wouldn’t be harmed by returning to the “status quo.”

But in a study published earlier this year in the journal Cell: Stem Cell, Levine found the judge was probably wrong. “Rather than simply preserving the status quo, this injunction substantively changed the playing field,” Levine wrote.

In his study, Levine relied on a survey of 370 stem cell scientists. He found those working with human embryonic cells were hit hardest: 75 percent said the temporary ban affected their research, with one-quarter deeming the impact substantial. Nearly half said policy uncertainty also affected their work.

Interestingly, 41 percent of stem cell scientists who didn’t work with human embryonic stem cells also said the temporary ban affected their research, with one out of 10 of these saying the effects were moderate or substantial.

“No one said, ‘Here was a project I was working on that was exciting that I stopped,’” Levine told DOTmed News. “But some people said if next round of lawsuits stopped federal funding, they wouldn’t be able to do [the research].”

While it’s true that states, seeing the federal government shy away, have stepped in to offer funds for stem cell research – California intends to pony up billions over the next decade – the real fear is that these policy debates could have one major long-term negative effect: scaring away bright young researchers. “If this flares up again, why would they go into this field?’ Hoffman asked. “With all the policy uncertainty, funding uncertainty, I mean there’s going to be enough problems for young investigators as it is.”

The uncertainty is weaker in China, of course, because controversy is much weaker. China has no similar restrictions on embryonic stem cell research – it’s regulated, but there are no restrictions on funding for new cell lines – and no similar cultural pressure that politicizes the science.

That’s partly because the fuel for the debate – people who believe that embryos are “persons” that should not be destroyed to harvest stem cells are largely absent.

“The whole issue of embryo and personhood, it’s not there for people in this culture,” Hoffman said.

“Struggling” science
But not everyone’s convinced by China’s stem cell efforts.

Among the skeptics is Douglas Sipp, a researcher based in Japan. In a 2009 article in the Journal of Cellular Biochemistry, “Stem Cell Research in Asia: A Critical View,” he called China’s stem cell program “struggling” and “mired in controversy and weak performance.” He blames its problems on a lack of transparency for funding projects, perverse incentives to reward researchers by handing out bonuses solely for getting articles in high-impact publications and poor communication among the country’s labs and researchers.

“In the heyday of the excitement over human embryonic stem cells, for example, Chinese labs may have generated in excess of 100 new [stem cell] lines, but the lack of English language publications and the failure of the labs to register their lines on international databases has made this impossible to confirm, and the lines have made no international impact,” he wrote.

Communication is often cited as an issue. Levine said while there was certainly “world-class stem cell research in China,” with top labs doing work on the level of the best labs elsewhere in the world, it’s hard to gauge the quality of the “next few tiers of labs,” often because if results aren’t published in English-language journals, “few people in the West read it or understand it.”

“It’s hard to judge as a whole,” he noted.

Welcome to the Wild East
Possibly the weightiest albatross dangling from the neck of Chinese science is a reputation for fraud where stem cells are concerned. Hitherto lightly regulated stem cell “clinics” have mushroomed around the country offering unproven cures for virtually every disease in the Merck Manual: autism, paralysis, diabetes, even depression.

For instance, Beike Biotech, one of the most popular clinics for western medical tourists, in Shenzhen, boasts on its website that its “proprietary” stem cell therapy can treat “ataxia, brain injury, cerebral palsy, diabetic foot disease, lower limb ischemia, multiple sclerosis, muscular dystrophy, spinal cord injury and optic nerve damage.”

What evidence the clinics provide for their patients typically takes the form of inspiring anecdotes and patient testimonials. “They sell stories, they don’t sell science,” Hoffman said.

Regardless of how well the stories sell, the credibility of China’s stem cell science has certainly taken a beating, with many international researchers unaware that China offers the field anything aside from centers hawking unproven therapies to desperate foreigners. This is especially irksome to the legitimate academic researchers, who typically have nothing to do with the stem cell centers. “They’re very separate,” McMahon said.

The government knows this and has made efforts to fight back. In May 2009, China issued new regulations meant to curb the wild practices of these clinics. The regulations classified stem cell treatment as a “category 3” medical technology, meaning a clinic offering the therapy would have to show a national regulatory body evidence of clinical efficacy and safety before it could be used on patients. The rules were meant to take effect by fall 2009, but, two years later, it’s not clear that any of the clinics have been punished or shut down.

“Will life get harder for some of these clinics?” Hoffman asked. “The jury is out on that.”

China’s catching up
Stem cell publications by country (2008)

China: 1,116
USA: 6,008
Germany: 1,652
Japan: 1,460
UK: 1,308

Source: “Cultivating regenerative medicine innovation in China,” by Dominique S. McMahon, Halla Thorsteinsdóttir, Peter A. Singer and Abdallah S Daar.