The United States is increasingly concerned that China could use its dominant position in supply chains as an additional means of increasing its political and military influence, according to a US intelligence report released on Wednesday.

The Office of the Director of National Intelligence’s “Annual Threat Assessment” notes that Beijing is already using its control over supply chains to force foreign companies and some states to transfer technology and innovation to China.

“The Chinese state is able to use its dominant position in key supply chains to achieve its goals, but not without significant costs to itself,” the report said.

According to the document, the danger would increase if Beijing successfully invaded Taiwan – the island is also one of the world’s leaders in terms of industrial and technological components, especially semiconductors.

The disruption caused by the COVID-19 pandemic has shown the world the importance of supply chains in a globalized economy and illustrated how the closure of a single plant in China or anywhere else in the world can disrupt large industrial operations on the other side of the globe. .

The US report points to China’s dominance in certain technology sectors, including semiconductors, certain minerals, batteries, solar panels and even pharmaceuticals.

He cites a speech by Xi Jinping in April 2020, in which the Chinese president said China wants to strengthen its control over key supply chains so it “can use these dependencies to threaten and isolate foreign countries in times of crisis.”

“China’s dominance in these markets could pose significant risks to the US and Western manufacturing and consumption sectors if the Chinese state can skillfully use its dominance for political and economic gains,” the report said.

The document stresses that there are other military challenges from China: the Chinese military’s conventional missile capabilities “probably” pose a serious threat to US bases in East Asia.

And in space, China is likely to be “one of the best in the world” by 2030 in all but certain technologies.

By then, the commercial arm of China’s space industry will also become a major competitor for its Western rivals, the report added.

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