Intro
While Congress debates defense budgets, China just delivered its 600th vessel from a single state-run shipyard. Shanghai Waigaoqiao averages 27 ships a year—tankers, carriers, even cruise ships—rolling off the line. Its total output now tops 102 million deadweight tons since 2003.
The scale difference is hard to ignore. Chinese shipyards now control more than 230 times the tonnage capacity of America’s. While Beijing expands production, the U.S. struggles to finish a handful of destroyers on time. Our adversaries don’t just build faster. They have aligned state planning, civilian industry, and military needs into one machine.
Why Authoritarian DIBs Move Fast
Authoritarian defense industries thrive on certainty. China’s state-owned giants report directly to SASAC (State-owned Assets Supervision and Administration Commission of the State Council), which appoints their leadership and guarantees orders years in advance. A shipyard manager in Shanghai knows exactly what his line will build in 2028. That kind of clarity lets firms invest in new facilities and workers without fear the contracts will vanish. No one has to guess what the government wants.
Civil-military fusion erases boundaries the U.S. still insists on maintaining. The 14th Five-Year Plan orders “dual-direction conversion” of research across aerospace, biotech, and AI. Civilian labs feed defense programs, and defense programs spin off into commercial markets. The Pentagon’s 2024 China Military Power Report warns this is no slogan: it’s a national strategy to fuse industries into one integrated system.
Finally, the state compels resources into place. A 2022 State Council plan directed the transfer of aerospace, shipbuilding, and weapons technologies into civilian and emergency sectors. Beijing can reassign entire supply chains at will—steel mills, component factories, even the labor pool. In practice, that means a surge in shipbuilding or drone production isn’t debated; it’s ordered.
That alignment comes at the cost of freedom, but it produces speed the U.S. can’t match.
Why the U.S. Lags
America’s defense industry doesn’t lack technology; it lacks scale. Procurement is fragmented across services and primes, with no central demand signal. Startups prove their tech in “pilot purgatory” but rarely cross into production because programs stall or funding dries up. The GAO found median contract lead times for major awards grew by 70 days between 2019 and 2022. In a crisis, that delay is not a statistic—it’s lost time on the battlefield.
The supply base is just as brittle. China mined 234,000 tons of rare earths in 2023, about 70% of the world’s total. The U.S. produced barely a fraction of that. Dependence extends into semiconductors: a Commerce survey showed two-thirds of American firms still rely on Chinese chips. Even explosives and propellants for munitions are in short supply, leaving the U.S. with limited surge options.
And the workforce is running dry. The median welder earns $51,000, not much more than a starting job in construction. Apprenticeship completion rates sit below 35%. Skilled machinists and toolmakers are flat-lined at zero growth. Factories can buy machines, but they can’t conjure people.
The U.S. leads the world in advanced prototypes, but without a stronger industrial base, those designs never scale. We have technology, but no surge capacity.
Recommendations: What Congress Must Do
1. Build the workforce. Factories can’t surge without people. Congress must expand defense-focused apprenticeships at community colleges and cover part of the wage gap to make welding, machining, and electronics work competitive. These jobs aren’t glamorous, but they’re decisive. A shipyard without welders is just an empty dock.
2. Lock in surge contracts. The Defense Production Act already gives the Pentagon authority to pre-negotiate capacity. But GAO reports those tools aren’t used consistently. Congress must require standing surge contracts for munitions, drones, and key inputs so production ramps in weeks, not years.
3. Create a supply chain mapping office. The Pentagon struggles to track where its 200,000 suppliers source parts. GAO has warned repeatedly about blind spots. Congress must establish a permanent office to map critical dependencies, report risks, and enforce country-of-origin transparency before a crisis hits.
Closing
The U.S. doesn’t need command economies to compete. It needs clear demand signals, a trained workforce, and better use of the tools it already has. America’s strength has always been industrial scale when it mattered most. If Beijing can surge by command, America must surge by design. The House Armed Services and Senate Armed Services Committees should make that the test of the next defense bill.