US Defence officials are concerned over China’s use of COVID-19 situation to gain stakes in strategically important companies of United States as the impact of novel coronavirus has left several companies in dire need of capital. Amid the pandemic, it getting hard for the defence department to keep an eye on national security and help protect smaller companies down the chain, CNN reported. “We are paying close attention to any indicators that China is leveraging Covid-19 to take advantage of a situation where defence companies need capital more than ever,” a defence official told CNN.
In April, Ellen Lord, undersecretary of defence for acquisition and sustainment said it is paying close attention to ‘adversaries’ against the ‘economic warfare’ with the United States. “We have to be very, very careful about the focused efforts some of our adversaries have to really undergo sort of economic warfare with us, which has been going on for some time,” Ellen Lord, undersecretary of defence for acquisition and sustainment was quoted as saying by CNN.
US Committee on Foreign Investment protects its interest against hostile countries gaining ownership in strategically important companies. But the pandemic is changing the definition of national security concerns to include drugs, protective gear and medical supplies.
“These are now national security needs and we probably should have been thinking about it a long time ago in terms of biowarfare that we should have a trusted industrial base or a set of trusted allies — the UK, or NATO allies or Japan or Korea — who are trusted in that regard,” Bill Greenwalt, a former Pentagon official.
Give the threat posed by foreign acquisition, Pentagon has been offering tools to help small US businesses defend themselves against adversarial investment and conducting background checks with other government agencies to ensure transparency.
US President Donald Trump’s trade adviser Peter Navarro recently told CNN if Trump wins reelection, Washington DC will likely take offshore supply chains as national security priorities.
“If we fail to do that in the face of this crisis, we will have failed this country and all future generations of Americans,” Navarro said.
The US State Department has also warned US allies to “avoid economic overreliance on China” and “guard their critical infrastructure” from China’s influence.
Chad P Bown, a senior fellow at the Peterson Institute for International Economics, pointed to recent China’s economic coercion of Australia on the political matter saying, “this is how China operates and everybody knows it.”