By Liu Zhen
The US defence industrial base remains dependent on Chinese suppliers despite efforts to decouple – and that raises concerns over war readiness, according to a report by data analytics firm Govini.
Chinese firms still made up 9.3 per cent of the primary contractors, or Tier 1 suppliers, involved in major US defence programmes across nine critical sectors in 2024, Govini said in its annual National Security Scorecard.
“The United States is not prepared for the war that we may have to enter if China said, ‘today is the day’,” said Tara Dougherty, chief executive of the defence acquisition information firm based in Washington.
Its researchers analysed US Department of Defence spending data in nine key areas – aviation, maritime, C4I (command, control, communications, computers and intelligence), mission support, nuclear, missiles and munitions, ground, missile defence and space.
They concluded that US supply chains were “incredibly brittle” and that China, categorised as an “adversarial” nation, was home to the most Tier 1 suppliers.
According to the report, the missile defence sector had the most significant reliance on Chinese suppliers, who had a share of 11.1 per cent.
The nuclear sector had the lowest reliance at 7.8 per cent, with 45 per cent of suppliers to that sector based in the United States.
But among foreign suppliers to the nuclear sector, China had the most at 534, compared to US allies Canada and Britain at 405 and 366, respectively.
Meanwhile, the number of Chinese suppliers to the sector was found to have gone up by 45.5 per cent from the previous year.
The report also noted that many weapon systems – from hundreds of them in the aviation and maritime sectors to a handful in nuclear – depend on critical minerals, whose production is dominated by China.
“China’s recent ban on the export of critical minerals underscores this vulnerability,” the report said, referring to Beijing’s retaliatory moves to impose export controls on rare earth elements and other critical materials amid its tech and trade war with Washington.
In an April report, Govini said 80,000 weapon parts in the US were made using antimony, gallium, germanium, tungsten or tellurium. With global supply of these five critical minerals dominated by China, nearly 78 per cent of all US weapon systems could be affected by the export curbs, the report found.
The latest report also compared the numbers of patents granted in each sector in recent years, finding that China had outpaced the US in most of them.
While the report highlighted the vulnerabilities in America’s military supply chain, Dougherty said that completely eliminating Chinese suppliers might not be feasible.
“I’m not even sure that eradicating China from the supply chain is the right goal,” she said, suggesting instead that it would be better to identify and strengthen the most critical components.
“I think it’s about dissecting these platforms into what’s critical and what’s not,” she added.
The report also pointed to other risk factors such as an overreliance on the top prime contractors, and small suppliers that were operating with obsolete technology, ageing workforces and slim profit margins.
“Roughly half the [spare] parts have at least one major risk factor,” Dougherty said.