US Security Panel Sounds Alarm on China's Strategic Tech Gains
A high-level US security and economic commission has issued a stark warning to Congress, urging immediate action to protect American supply chains in biotechnology, quantum computing, and foundational semiconductors. The annual report from the U.S.-China Security & Economic Commission, released on Tuesday, highlights China's rapid advances and potential to weaponize its dominance, much like it did earlier this year with rare-earth minerals.
Areas of Critical Vulnerability
The report identifies several sectors where China has developed significant, and potentially dangerous, leverage. In biotech and pharmaceuticals, China now controls a staggering 80% of the global supply of basic ingredients for essential drugs like antibiotics and fever reducers. The panel also flags China's command over printed circuit boards, which are crucial for all electronics, where it accounts for roughly half of worldwide production.
Furthermore, the commission points to China's heavy investment in its manufacturing sector, which is unleashing a flood of low-cost, advanced exports. This trend is creating what some experts are calling a "China Shock 2.0," posing a severe threat to domestic industries in the US and other nations.
Recommendations for a Strategic Response
To counter these risks, the panel put forward 28 specific recommendations. A key proposal is the creation of a consolidated "economic statecraft" entity to crack down on Beijing's evasion of US export controls and sanctions. The commission also wants Congress to strengthen the Bureau of Industry and Security within the Commerce Department.
Other critical recommendations include:
- Reducing US dependence on Chinese active pharmaceutical ingredients to bolster the biotech supply chain.
- Increasing protection for the US power grid from threats posed by Chinese-made components.
- Establishing a "Quantum First by 2030" national goal to secure American advantage in cryptography and drug discovery.
Geopolitical Tensions and the Taiwan Factor
The report extends its concerns beyond economics to geopolitics, detailing China's use of more "coercive tactics" internationally. It cites unannounced live-fire military exercises in the Tasman Sea as actions designed to intimidate neighbors and test allied resolve.
A significant portion of the warning focuses on Taiwan. The panel notes that Beijing has intensified military activities around the island and that its domestic propaganda has suggested that Taiwanese "provocations" could justify military action. While an imminent invasion is not anticipated, the commission concludes that the US and its allies can no longer assume they will have ample time to prepare for a Taiwan contingency, marking a serious shift in risk assessment for investors and policymakers alike.
