A Pentagon report labels China as a “significant and growing risk” to the U.S. defense industry, saying that China dominates production and supply chains of electronics and raw materials critical to national security. The report recommends a boost for investment in key U.S. industries to break that dependence.
CGTN’s Nathan King has the details.
U.S. President Donald Trump received the annual Defense Industrial Base report at the White House on Friday.
The Pentagon is worried about the dependence on Chinese and Asian imports including circuit boards, rare earth metals, lithium batteries for submarines and other critical equipment that are strategic to the U.S. military.
The Pentagon also says they have long been worried about so-called ‘kill switches,’ hidden in electronics that could be used to turn off vital equipment during a conflict–or, embedded chips that could be used to spy or eavesdrop.
This report also echoes White House charges that Beijing subsidizes key industries and steals U.S. technology. The Pentagon says some U.S. suppliers are on the verge of shutting down or switching solely to foreign suppliers, and also blames the U.S. political system for fluctuating short-term budgets that don’t invest sufficiently in U.S. industries.
The report could be an impetus to build U.S. home grown industries from aluminum to advanced-circuit boards and beyond. It will be expensive, as the U.S. already has an annual military budget – if you add in the CIA – of over a trillion dollars. It also may convince U.S. companies that have dual use production facilities ( civilian and military) in China or in Asia to relocate back to U.S.
Breaking the U.S. military supply chain from China and elsewhere in Asia could have a big economic hit on some companies, as the U.S. military and its contractors spending power are almost unrivaled globally. This report will also do nothing to improve relations between Beijing and Washington.