Pentagon sees China as 'growing risk' to US arms industry

The US Defense Department has warned that China represents a "significant and growing risk" to the US military's industrial base and American national security, according to a new Pentagon report.

There are nearly 300 vulnerabilities that could affect critical materials and components essential to the US military and arms industry, the Pentagon said in a nearly 150-page report released Friday.

"A key finding of this report is that China represents a significant and growing risk to the supply of materials and technologies deemed strategic and critical to US national security," the report said.

The report also examined US shortcomings that contribute to weakness in domestic industry, including inconstant US military budgets that make it difficult for American companies to predict government demand. Another weakness cited was in US science and technology education.

A number of recent developments have heightened tension between Beijing and Washington, including a bitter trade war between the world's two largest economies. The trade war has added to tensions over cyber spying, freedom of navigation in the South China Sea and self-ruled Taiwan.

US Vice President Mike Pence accused China on Thursday of efforts to undermine President Donald Trump ahead of the November 6 congressional elections, saying that Beijing was "meddling in America's democracy."

Pence's comments echoed those of Trump himself in remarks at the United Nations last month, when Trump said that "China has been attempting to interfere in our upcoming 2018 election."

Chinese officials rejected the accusations.

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The Trump administration sees national security risks from Beijing's growing military and economic clout and wants to be sure China is not able to hinder the US military by cutting off supplies of materials or by sabotaging technology it exports.

The report noted that 90 percent of the world's printed circuit boards are now produced in East Asia, with over half of that occurring in China, presenting a risk to US military.

"With the migration of advanced board manufacturing offshore, (the Defense Department) risks losing visibility into the manufacturing provenance of its products," the report said.

The report identified multiple cases where the sole remaining U.S. producer of critical materials was on the verge of shutting down and importing lower-cost materials "from the same foreign producer county who is forcing them out of domestic production."

The Pentagon has long fretted that "kill switches" could be embedded in transistors that could turn off sensitive US systems in a conflict. The report cited the risk of "'Trojan' chips and viruses infiltrating US defense systems."

US intelligence officials also warned this year about the possibility China could use Chinese-made mobile phones and network equipment to spy on Americans.

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