(Washington) There are growing concerns in the United States that China could use its dominant position in supply chains as an additional means of advancing its political and military influence, according to a US intelligence report released on Wednesday.
The “Annual Threat Assessment”, written by the Office of the Director of National Intelligence, argues that Beijing is already using its grip on supply chains to force foreign companies and certain states to transfer technologies and innovations to the China.
“The Chinese state is able to exploit its dominant positions in key supply chains to achieve its goals, however not without significant cost to itself,” the report asserts.
The danger would only be increased in the event of a successful invasion of Taiwan by Beijing – the island also being one of the world leaders in terms of industrial and technological components, and particularly semiconductors –, according to the document.
The disruptions caused by the COVID-19 pandemic have shown the world the importance of supply chains in the globalized economy, and illustrated how the shutdown of a single factory in China or elsewhere in the world could lead to the interruption of major industrial operations on the other side of the planet.
The American report lists in particular the domination of China in certain technological sectors, including that of semiconductors, certain minerals, batteries, solar panels, and even pharmaceutical products.
He cites an April 2020 speech by Xi Jinping in which the Chinese president said China wanted to increase its control over key supply chains so that “it can use these dependencies to threaten and isolate foreign countries during a crisis.” .
“China’s dominance in these markets could pose significant risks to U.S. and Western manufacturing and consumer sectors if the Chinese state is able to skillfully leverage its dominance for political and economic gain,” the report said.
The document points out that other military challenges are also posed by China: the Chinese military’s conventional missile capabilities now “probably” pose a serious threat to US bases in East Asia.
And in space, China will likely be “among the best in the world” by 2030 in all but some specific technologies.
By then, the commercial arm of China’s space industry will also be a major competitor to its Western rivals, the report concludes.