Intelligence chief warns: China is weaponizing supply chain dominance
By Oliver Young // Mar 13, 2023

Director of National Intelligence Avril Haines has warned that China is already using its supply chain dominance to force foreign companies and countries to transfer technologies and intellectual property to it.

Haines issued the warning through her office's "Annual Threat Assessment" report.

"The government of China is capable of leveraging its dominant positions in key global supply chains in an attempt to accomplish its goals, although probably not without significant cost to itself," the report said.

It singled out China's dominance in technology sectors, including semiconductors, critical minerals, batteries, solar panels and pharmaceuticals.

The report cited an April 2020 speech by Chinese President Xi Jinping, who said China seeks to increase control of key supply chains to be "able to use those supply chain dependencies to threaten and cut off foreign countries during a crisis."

"China's dominance in these markets could pose a significant risk to U.S. and Western manufacturing and consumer sectors if the Government of China was able to adeptly leverage its dominance for political or economic gain," it said.

The danger could escalate if China is able to take over Taiwan, another leading contributor to industrial and technology components.

China seizing Taiwan "probably would have wide-ranging effects, including disruption to global supply chains for semiconductor chips because Taiwan dominates production of cutting-edge chips," it said.

Pandemic disruptions magnify importance of supply chain

The importance of the supply chain is magnified by the disruptions at the height of the Wuhan coronavirus (COVID-19) pandemic.

Supply chain refers to the way components of products make their way from different sources around the world through various countries for preliminary and final assembly before products reach the market.

The pandemic demonstrated how the disruption of a single factory could halt the work of major industrial operations across the globe.

In May 2021, Ford Motor either halted or cut production at eight production plants in North America due to the shortage of semiconductor chips. (Related: Top selling vehicles are being held back, made without computers as semiconductor shortage sweeps the globe.)

"Our teams continue making the most of our available semiconductor allocation and will continue finding unique solutions to provide as many high-quality vehicles as possible to our dealers and customers," Ford said in an emailed statement at the time.

The report also noted that the People's Liberation Army Rocket Force's conventional missile capabilities now pose a serious threat to U.S. forces and bases in East Asia.

According to the report, China will probably be "world-class" in all but a few specific technology areas by 2030.

It added that China's commercial space sector will be a major global competitor that could undercut the prices of Western rivals by that time.

Meanwhile, China's Foreign Ministry spokesperson Mao Ning said Beijing has no intention of challenging, threatening or undermining the U.S. or other countries.

"China's development is to help the Chinese people live happy lives," Mao said at a daily press briefing.

"We think the United States, as the only military superpower and a country armed to the teeth, should reflect on what it can and should do before criticizing other countries."

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04/05/2021 / By News Editors
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