Geostrategic Media Political Commentary, Analysis, Security, Defense
Simona Tomas
Washington urgently needs a robust economic security strategy that not only strengthens our relationships with allies but also builds domestic capability, ensures the integrity of our supply chains, and maintains our technological edge. Among the most pressing concerns today is China’s growing dominance in the global electronics manufacturing industry, particularly its rapidly expanding control over the digital display market. This dominance threatens not only the economic health of the U.S. electronics sector but also poses significant national security risks that demand immediate attention.
China’s ascent as a global leader in electronics manufacturing is no accident. It is the result of a deliberate, strategic effort by the Chinese government, heavily subsidized and aimed at dominating critical technological sectors. The “Made in China 2025” initiative is a prime example of this, with billions of dollars funneled into companies producing everything from smartphones to advanced digital displays. As a result, Chinese firms have dramatically increased their market share in the LCD market, soaring from 13 percent in 2016 to 45 percent in 2023.
The implications of this dominance are profound and multifaceted. Economically, China’s state subsidies distort the global market, making it nearly impossible for companies in countries like Japan, South Korea, and the United States to compete on a level playing field. We’ve seen this before: companies unable to match the low prices of Chinese counterparts face declining domestic manufacturing and job losses. This erosion weakens the economic resilience of the U.S. and its allies, increasing a dangerous reliance on Chinese supplies.
But the national security implications are even more alarming. Dependence on Chinese-manufactured digital displays and other electronic components creates vulnerabilities that could be exploited in times of conflict or diplomatic tension. China’s control over such a significant portion of the electronics supply chain gives it the potential to disrupt or manipulate the availability of critical components, with devastating effects on everything from consumer electronics to military hardware.
Moreover, the similarities between display and semiconductor manufacturing provide China with a backdoor opportunity to leverage its dominance in displays to accelerate its semiconductor ambitions. With process similarities between the two industries estimated to be as high as 70 percent, China could bypass traditional barriers in semiconductor technology. A successful overtaking of the semiconductor industry by China could be a strategic victory for Beijing without a single shot being fired.
The scale of China’s government subsidies for the display industry is staggering, reaching up to 90 percent of capital expenditures in some cases, such as solar technology. This relentless financial support enables continuous innovation and market expansion, further entrenching China’s position in global electronics manufacturing. These subsidies are not just about securing economic dominance; they are part of a broader strategy to achieve technological superiority, which could have severe implications for U.S. national security.
Addressing this multifaceted threat requires a comprehensive strategy that encompasses economic policy, technological innovation, and national security measures. The United States cannot counter China’s dominance alone. Washington must rethink its approach to trade with Beijing, particularly in the electronics sector, and work with allies and partners to develop a coordinated response to China’s market practices.
Investing in domestic manufacturing capabilities is essential. This includes not only providing financial support but also fostering an environment that encourages innovation and the development of cutting-edge technologies. Public-private partnerships could play a crucial role in this effort, ensuring that U.S. firms have the resources and support they need to compete globally.
Ensuring the integrity of supply chains is also critical. This involves rigorous vetting of foreign-manufactured components and developing secure, domestically produced alternatives. Enhanced cybersecurity measures must be implemented to protect against potential espionage and cyber threats, which are increasingly sophisticated and pose significant risks to national security.
China’s state-subsidized electronics manufacturing industry presents a clear and present danger to the United States’ economic stability and national security. It is imperative that we recognize and address this threat with a multifaceted approach that strengthens our relationships with allies, builds domestic capability, ensures the integrity of our supply chains, and maintains our technological edge. Failure to act now could leave the United States vulnerable in an increasingly digital and interconnected world.
