 Bloomberg -- Zhang Haitao was a basketball-loving teenager who dreamed of going to a specialized sports high school when he got a pain in his right arm that just wouldnt go away. It turned out to be acute lymphoblastic leukemia.The discovery set Zhang and his family, from a village deep in the mountains of southwestern Chinas Sichuan province, on a journey familiar to most cancer patients a revolving door of hospital visits, blood tests and three rounds of chemotherapy. It was then that Zhangs doctor suggested a last-ditch option: an experimental gene therapy being trialed by a Chinese startup called Gracell Biotechnology Ltd.After spending three weeks in the hospital in May during which white blood cells were removed from his body, genetically engineered, and then infused back in an analysis of Zhangs bone marrow in June showed his body was clear of cancer.Seven months later, monthly medical tests conducted at a hospital in the nearby Chinese metropolis of Chongqing show he remains cancer free. I dont remember much about the treatment as I had a fever throughout, said Zhang, whos now almost 16 and spends his days playing video games and texting his friends. It seems like a new solution that will give people hope.Read more about how China is overhauling its healthcare systemThe therapy Zhang received was Chimeric Antigen Receptor-T cells, known as CAR-T, and its being hailed as one of the most exciting developments in the quest to cure cancer. First developed by Israeli scientist Zelig Eshhar in the 1980s, CAR-T re-works the genes of the bodys own immune cells so that they actively seek out and destroy cancer cells. While its been embraced by researchers and drugmakers around the world, perhaps nowhere is CAR-T having more impact and being pushed dangerously close to its limits than in China, home to the worlds biggest cancer population and some of the most ambitious experiments.CAR-T works by supercharging T-cells, the bodys main line of defense against disease, so that they latch onto and destroy cancer. In clinical trials, leukemia patients who failed to respond to other therapies have shown remission rates of over 90 within two months of treatment.Though drug giants Novartis AG and Gilead Sciences Inc. have been marketing CAR-T globally since 2017, its expensive. The process of engineering an individuals cells in a laboratory and then replicating them has also meant that some patients with more aggressive cancers can die waiting for treatment.Thats where Gracells therapy was revolutionary. Instead of the two to three weeks taken by current treatments from American and European drug makers, the Shanghai-based company set up by a group of veteran Chinese cell-therapy researchers is churning out cancer-killing immune cells overnight.And theyre doing it much cheaper in some cases than global pharmaceutical giants. Gracell has developed a process using genetic engineering that speeds up the cell production stage, according to founder William Cao Wei. Gracell plans to price its CAR-T treatment for about 500,000 yuan 71,000, well below the 475,000 price tag for Novartis Kymriah, the Swiss companys CAR-T therapy used to treat the type of blood cancer that Zhang had. A similar treatment from Gilead, based in Foster City, California, costs 373,000.The aging population and a raft of lifestyle factors mean that more new cancer patients are emerging in China than anyplace else in the world, giving the country a significant stake in the global fight to find a cure. Emboldened by the governments push to become a scientific superpower and to dominate the field of genetics, Gracell and other Chinese biotech startups are racing ahead, with China likely to approve CAR-T for widespread use as early as next year. Up for grabs is a market for cancer drugs and experimental treatments that has exploded to 133 billion a year worldwide, according to life sciences researcher Iqvia Institute.There can be both cooperation and competition between us and CAR-T developers in developed markets, said Cao, who is also Gracells chief executive officer. But there will definitely be competition. That drive to forge ahead and in front can be seen in the way China is approaching regulation of CAR-T. The country is weighing new rules that would loosen oversight of the revolutionary technology, allowing academic ethics committees within hospitals to approve new CAR-T treatments and then administer them to patients for a fee.That would markedly loosen Chinas current framework, which is presently in line with the approach taken by regulatory bodies like the U.S Food and Drug Administration and the European Medicines Agency. These entities are the sole authorities in their jurisdictions that evaluate and approve all CAR-T therapies before they are cleared for public use.There is concern among researchers, regulatory experts and drugmakers themselves that allowing hospitals to market treatments for a fee could cause profit-making to trump ethical considerations. In a 2016 case widely reported in the Chinese media, a 22-year-old college student with a rare type of tissue cancer called synovial sarcoma died after going through an experimental cell therapy at a Beijing hospital.Hospitals can become both players and referees at the same timeBefore his death, the patient posted an essay online claiming the hospital had falsely advertised the treatments effectiveness, and that Chinese search engine Baidu Inc. had displayed the hospitals advertising so that it appeared like a credible search result rather than a paid commercial. The essay went viral and sparked an outcry on Chinese social media over the ethics of private hospitals and the regulation of therapies for serious illnesses.Censured by the Cyberspace Administration of China, Baidu responded by restricting the number of sponsored posts to 30 of a results page, and established a 1 billion yuan fund to fight fraud. The hospital did not respond to requests for comment.Its not the only death allegedly linked to genetic cell therapy in China. Last year, a hospital in the eastern city of Xuzhou was sued over the death of a lymphoma patient who died after receiving a CAR-T treatment. The patient developed severe side effects, including bleeding within the abdomen. The patients family argued that the treatment led to his death, but the hospital and doctor said it was the result of late-stage cancer. A court is yet to rule on the case.Chinas proposed new framework is reminiscent of its wider approach to the regulation of science, an area President Xi Jinping has prioritized as part of his ambition to cement the country as a world power.The research of He Jiankui, an American-educated Chinese scientist whose revelation last year that hed edited the genes of twin baby girls ignited a global firestorm, was signed off by the ethics committee of a Shenzhen hospital. The experiment, which He claimed made the twins immune to HIV, wasnt backed by peer-reviewed data and still hasnt been verified. Scientists around the world have condemned it as an irresponsible use of a technology that has the capacity to alter the very building blocks of life. The long-term effects of Crispr, the gene-snipping tool used by He and embraced by Chinese researchers, are also yet to be fully understood.Chinas new draft rules on CAR-T could give rise to the same scenario, critics say.Theres no guarantee that the hospital committees have the qualifications to evaluate such a complicated therapy, said Tao Xin, a Washington, D.C.-based lawyer at Hogan Lovells LLP who specializes in the health-care regulatory law of both the U.S. and China.The proposal indicates that hospitals can charge a fee for the therapy, in addition to approving its own therapy, he said. With these two combined, are we going to see a replay of the 2016 incident? If theres money to be made and I get to decide whether to do it or not, thats really controversial.Read about how Crispr is being used in Chinas quest to make a super pigGracells Cao is also critical of the new framework as it removes the role of an independent entity that evaluates the therapys safety and efficacy: Hospitals can become both players and referees at the same time.Novartis and Gilead declined to comment on Chinas regulatory plans, while a spokesman for the National Health Commission, the body in charge of governing the countrys health sector, said that the proposed new rules are still under discussion.Read about how Chinese parents are using DNA tests to map out their childrens livesMeanwhile, Chinese companies are racing ahead on CAR-T and attracting hundreds of millions of dollars from investors like Singapores sovereign wealth fund Temasek Holdings Pte Ltd, as well as global pharmaceutical giants. Venture capital investment in Chinese biotech firms climbed to 17.6 billion last year, quadruple the amount from 2015, according to consultancy ChinaBio LLC. Gracell which counts Temasek and Lilly Asia Ventures, the venture capital firm spun off from Eli Lilly Co. as investors says 32 of the 35 patients its enrolled in its China-based trials over the past year have gone into complete remission with minimal residual disease tested negative four weeks after the CAR-T infusion a clinical term that basically means there was no evidence of disease remaining in their bodies, the highest possible efficacy level for a therapy.Other Chinese startups like Nanjing Legend, a unit of Hong Kong-listed Genscript Biotech Corp., and U.S.-listed Cellular Biomedicine Group Inc., have developed similar capabilities. 