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A Modest Proposal: Let's Outsource the Entire U.S. Defense Base to China!
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American dependence on China grows by the day. The latest news is that the United States has been reduced to leasing a Chinese satellite to handle communications with U.S. military bases in Africa. Surprising, isn’t it? The nation that launched the world’s first communications satellite (I remember it well – it was called Telstar) has so lost its manufacturing mojo that it has to rely on its most formidable military adversary to provide the hardware for some of its most sensitive communications. This at a time when underlying unemployment rates among U.S. manufacturing workers remain at near-depression levels.

For those who have been keeping score, this is all part of an epochal pattern in which the manufacturing capabilities of even such ostensibly strong American companies as Apple and Boeing have become deeply hollowed out (with dire long-term implications not only for the companies concerned but for American living standards). For more than half a century now, virtually every competent nation in the world has been extracting vital production technologies out of the United States. The American establishment’s attitude – lubricated by campaign contributions, consultancy fees, university chair endowments, think-tank subventions, and speakers’ honoraria – has been, “Come and get it.”

China has been a latecomer to the party but has been making up for lost time. First it offered itself as a low-wage location for labor-intensive manufacturing. Then it began to squeeze corporate America to transfer ever more advanced production processes and knowhow.

By 2005, the Defense Science Board, a Pentagon-funded think-tank, found that already then the damage to the U.S. semiconductor industry was catastrophic. Reporting that most of the key capabilities and technologies on which the U.S. semiconductor industry rested had moved offshore, the board summed up its inquiries with this chilling comment: “The potential effects of this restructuring are so perverse and far-reaching and have such opportunities for mischief that, had the United States not significantly contributed to this migration, it would have been considered a major triumph of an adversary nation’s strategy to undermine U.S. military capabilities.”

The board’s authoritative analysis received little attention in a complacent American press at the time and is completely forgotten now. Meanwhile profit-maximizing U.S. military contractors have clearly long since given up even the pretense of serving the U.S. national interest. The seriousness of the situation briefly surfaced in the American media in 2011 when Senator John McCain and Senator Carl Levin focused attention on the fact that U.S. weapons systems had been found to be riddled with counterfeit Chinese-made semiconductors.

Senator John McCain commented: “We can’t tolerate the risk of a ballistic missile interceptor failing to hit its target, a helicopter pilot unable to fire his missiles, or any other mission failure because of a counterfeit part.” Calling the issue “a ticking time bomb,” Brian Toohey, president of the Semiconductor Industry Association, commented: “The catastrophic failure risk inherently found in counterfeit semiconductors places our citizens and military personnel in unreasonable peril.”


McCain and Toohey were referring in particular to long-held fears, which had already been articulated in 2005 by the Defense Science Board, that suppliers in a hostile nation might plant “Trojan Horse” computer chips inside U.S. command and controls systems. A particular concern is that malicious circuitry can be concealed on a computer chip and activated at the last moment. It is not inconceivable that such “malware” could, for instance, hand an adversary control of U.S. missiles in flight. As the Defense Science Board pointed out, Trojan Horse circuitry is almost impossible to detect even with the most rigorous analysis. This is particularly so if a saboteur can accomplish matching subversions in both software and relevant hardware.

For now both the Pentagon and the American media establishment are playing down the significance of China’s role in America’s military communications system. The disclosure was made before a Congressional committee on April 25 but the story was missed or spiked by all the mainstream American media.

The Pentagon says there is nothing to worry about because all communications are encrypted. Even so, an obvious concern is whether, as Congressman Mike Rogers has suggested, Beijing now enjoys the option to switch off the Pentagon’s communications traffic at will.

In any case for long-time China watchers, larger questions remain. Which profit-maximizing U.S. defense contractor supplied the encryption system? And how many low-wage Chinese engineers were involved in developing that system?

Given how lax has become the Pentagon’s oversight, the U.S. military industrial complex will not be satisfied until it has outsourced its entire activities to China.

(Republished from Forbes by permission of author or representative)
• Category: Economics • Tags: American Military, China 
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