April 20, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

Stop China’s predatory investments before the US becomes its next victim

By: Jeffery A. Green

An ancient Chinese stratagem instructs military leaders: “Chen huo da jie,” or “loot a house when it's on fire.” The tactic is simple and self-explanatory — strike when your enemy is most vulnerable. As America's people and industries reel from the impact of a global pandemic, the United States must take immediate action to protect our economic interests from being looted by a uniquely opportunistic adversary.

Many U.S. companies have been substantially weakened in both market cap and revenue by the COVID-19 pandemic. With countless companies struggling to survive this crisis, the U.S. should institute a temporary but immediate and total ban on the sale of any U.S. company deemed “critical infrastructure,” whose value has been materially impacted by the pandemic, to a Chinese-owned or controlled entity.

Until the president certifies that the economy has fully recovered from the effects of COVID-19, this ban should remain in effect. This crisis necessitates action far beyond the existing review process of the Committee on Foreign Investment in the United States.

China's aggressive weaponization of its economy is no secret. Whether through currency manipulation or the withholding of critical materials, such as rare earth minerals, from the global supply chain, China has a reputation for using its economy in a targeted manner to further its ambitious global plans. Be it overtly or obliquely, through direct ownership or by de facto monopoly, China has encroached on or outright assaulted nearly every meaningful sector of the U.S. economy.

There is ample evidence of China's exploitation and deception related to COVID-19. Credible reports are emerging that Beijing has taken donations of personal protective equipment and sold them to Italy and possibly other foreign countries. Further, the dubiously low official infection and death figures released by China are being juxtaposed with higher U.S. infection and death rates to enhance the narrative that China is the more competent nation and should therefore be regarded as the preeminent global leader.

But China's infiltration and manipulation of the American economy and psyche began well before the COVID-19 crisis. From a national security perspective, Chinese companies have taken ownership of U.S. companies critical to the strategic supply chain, such as cutting-edge battery technologies and microelectronics. The U.S. is entirely dependent on China for segments of the supply of rare earth minerals, which are necessary for everything from cellphones to critical weapon systems. In 2013, a Chinese company purchased Smithfield Foods, simultaneously making the company the owner of both the largest pork producer globally and more than $500 million of American farmland.

Beyond industries like defense and agriculture that form America's economic and national security backbone, China has opened new fronts to project soft power as well. The Chinese conglomerate Tencent began a 2015 push, as Tencent Pictures, into Hollywood with significant investments in major U.S. films, including quintessentially American films, such as “Wonder Woman” and “Top Gun: Maverick.” The Cold War era was rife with films juxtaposing an American hero and a Soviet enemy. With Chinese investment in the U.S. film industry and the growing importance of the Chinese market for these films, it's no coincidence there is a dearth of communist Chinese government villains in today's entertainment market.

In 2004, China launched the Confucius Institute program, with the stated goal of promoting Chinese culture and language overseas. With mounting concerns about the spread of Chinese Communist Party propaganda through these institutes, as well as fears of possible espionage originating from them, universities across the world began canceling their affiliations. To date, more than two dozen U.S. universities have cut ties with these programs.

While America seeks to recover from the economic impacts of this pandemic, Congress and the administration must take swift action to ensure China is not afforded any opportunity to enhance its economic foothold in the U.S.

As distressed companies desperately look for funding and investment, the U.S. needs to send a message that financial exploitation by China will not be tolerated, especially if it involves companies working in industries critical to national security and our broader industrial base.

As part of this infiltration of our business community, defense enterprise and culture, China will likely hire an army of lobbyists and lawyers to oppose this proposal. This, too, should be prohibited for the length of the economic crisis in the U.S.

For millennia, Chinese dynasties have employed the tactic of looting a burning house as they vanquished enemies all around them. America must act before we become China's latest victim.

https://www.defensenews.com/opinion/commentary/2020/04/17/stop-chinas-predatory-investments-before-the-us-becomes-its-next-victim/

On the same subject

April 30, 2020 | International, Aerospace

The new Air Force One just racked up its first cost overrun
By: Valerie Insinna WASHINGTON — Boeing will have to pay $168 million out of pocket to cover increased costs on the VC-25B Air Force One replacement program, the company said Wednesday. Boeing attributed the overrun to “engineering inefficiencies” caused by the impact of COVID-19, but Chief Financial Officer Greg Smith said the program remains on schedule with a projected delivery of the first VC-25B in 2024. However, Boeing's quarterly report to the Security and Exchange Commission noted future risk to the program's cost and schedule as a result of the engineering challenges. “We believe these inefficiencies will result in staffing challenges, schedule inefficiencies and higher costs in the upcoming phases of the program,” the company stated in the report. It was not immediately clear how work on the VC-25B program had been disrupted. “That charge was really associated with COVID-19,” Smith told reporters in an April 29 phone call. “As we have folks working virtually — particularly on the engineering side — as well as that's gone, we certainly experienced some inefficiencies that has caused us to re-evaluate our estimates to complete those efforts. And that's essentially what you saw today in our results and the charge associated with that.” Smith added that although the program team has done a “good job” of managing the program in the face of changes caused by the novel coronavirus pandemic and is “executing very well on many fronts,” Boeing could not mitigate the added cost to the program this financial quarter. Air Force acquisition executive Will Roper said he spoke with Boeing Defense CEO Leanne Caret last night about the problem, but because the issue was “late breaking,” he referred detailed questions to the program office. On Wednesday night, the Air Force released a statement that — like Boeing — attributed the cost increase to “engineering inefficiencies.” Just two weeks ago, Roper praised the progress of the program, which used virtual tools to complete its critical design review in March and wrap up a modification readiness review in April. At the time, the program was on schedule with no disruptions due to COVID-19, he said then. The Air Force One replacement drew considerable attention in 2016 after then-President-elect Donald Trump tweeted that the program was too expensive and should be cancelled unless the cost—then projected as more than $4 billion—came down. In 2018, the Air Force awarded Boeing a $3.9 billion fixed-price contract to modify two 747s into the VC-25B configuration. " There has not been an increase to the $3.90B firm-fixed price contract with Boeing or the $5.3B VC-25B total acquisition cost," said Air Force spokeswoman Ann Stefanek. Although the total price of the program is estimated to hit $5.3 billion once ancillary costs such as new hangars and revised technical manuals are included, the fixed-price ceiling on the $3.9 billion deal ensures that Boeing will have to pay for any cost growth incurred while building the two new Air Force Ones. In February, Boeing began making structural changes to two Boeing 747s at its facility in San Antonio, Texas — paving the way for those jets to become VC-25Bs. The jets will also receive upgrades including enhanced electrical power, specialized communication systems, a medical facility, a customized executive interior and autonomous ground operations capabilities. “As planned in the baseline schedule, the next phase of modification is on course to begin in June 2020,” Stefanek said. https://www.defensenews.com/air/2020/04/29/the-new-air-force-one-just-racked-up-its-first-cost-overrun/
March 16, 2021 | International, Aerospace, Naval, Land, C4ISR, Security

La France, troisième du classement des pays exportateurs d’armement dans le monde
Selon le dernier rapport du SIPRI, les livraisons d'armes sont restées stables dans le monde sur la période 2016-2020 par rapport aux cinq années précédentes, avec une évolution contrastée selon les pays. La France, troisième exportateur mondial, a vu ses livraisons augmenter de 44% en volume en 2016-2020, ce qui représente 8,2% du marché. Plus de la moitié (59%) du volume de ces livraisons étaient destinées à trois pays : l'Inde, l'Egypte et le Qatar. Les Etats-Unis, leaders mondiaux, ont augmenté leurs livraisons, à +15%, et ont fourni des armes à 96 Etats, dont près de la moitié en volume (47%) au Moyen-Orient (24% pour la seule Arabie saoudite). Deuxième plus grand exportateur mondial avec 20% du marché, la Russie a vu ses livraisons baisser de 22%, recul essentiellement lié à la baisse de ses ventes d'armes vers l'Inde. La France se classe devant la Chine, qui a diminué de 7,8% ses exportations d'armes, et l'Allemagne, qui a, elle, augmenté ses exportations de 21% et compte la Corée du Sud, l'Algérie et l'Egypte parmi ses principaux clients. Le Figaro, Les Echos et L'Usine Nouvelle du 16 mars
January 21, 2020 | International, Naval

Australian defense leaders defend submarine buy with France’s Naval Group
By: Nigel Pittaway MELBOURNE, Australia – Australian defense leaders this week denied claims that their department was urged to consider alternatives to the navy's plans of buying 12 large conventionally-powered submarines from France's Naval Group. The claims, reported by local news media in the wake of an Australian National Audit Office (ANAO) report about the program earlier this week, suggested negotiations with Naval Group were at such a poor state the Commonwealth-appointed Naval Shipbuilding Advisory Board had earlier recommended drawing up contingency plans. However, in a statement released Wednesday by Secretary of Defence Greg Moriarty, Chief of Defence Force Gen. Angus Campbell, Chief of Navy Vice Admiral Mike Noonan and Deputy Secretary Naval Shipbuilding, Tony Dalton, denied the claims. “Contrary to media interpretations of ANAO's latest report on the Future Submarine Program, Defence was not advised to ‘walk away' from Naval Group by the Naval Shipbuilding Advisory Board,” the statement read. “In line with best practice and following the advice of the Advisory Board, Defence has continued to assess all of the risks that attend this highly complex program. At each stage, we are adopting relevant risk mitigation strategies. The ANAO acknowledges that Defence has taken steps to manage risks.” The 12 Attack-class submarines are being acquired under Australia's Sea 1000 (Future Submarine) program to replace six existing Collins-class boats which, without a major service life extension program, will need to be retired by 2036. The design is based on the French Barracuda-class nuclear attack boat, and the program is valued at either $34.5 billion (50 billion Australian dollars), or $55.2 billion (AUD 80 billion), depending on accounting practices. Either way, it is Australia's largest-ever defense acquisition program. The ANAO report, titled “Transition to Design,” found that the design phase of the program is already nine months behind schedule and two important milestones had been missed. It said Defence “could not demonstrate” its expenditure of $396 million (US $273 million) on the design to date has been fully effective in achieving the two milestones to date. The Defence Department has spent 47 percent of all program expenditure thus far on design work and, despite the risk mitigation strategies, it continues to describe program risk as “high”. “While the first scheduled major milestone under the Submarine Design Contract was reached five weeks later than planned, Defence and Naval Group are working towards the recovery of this delay by the next contracted major milestone in January 2021. Importantly, the delivery of the Attack-class submarine has not been delayed,” the statement continued. “Acknowledging the scale of this program, we remain confident that our work on the Attack-class program with Naval Group and Lockheed Martin Australia (as the Combat Systems Integrator) is progressing thoroughly and will result in the delivery of a regionally-superior submarine from the early 2030s, establishing a truly sovereign capability as we maximize the involvement of Australian industry.” The Sea 1000 program timeline calls for delivery of the first Attack-class boat in 2032 with service entry around 2034. https://www.defensenews.com/2020/01/17/australian-defense-leaders-defend-submarine-buy-with-frances-naval-group

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