Scott Perry Asks Expert How Chinese Manufacturing Reliance Will Affect US War-Fighting Capabilities

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During Tuesday’s House Oversight Committee hearing, Rep. Scott Perry (R-PA) questioned Chris Power, the Founder and Chief Executive Officer of Hadrian, about the United States’ manufacturing reliance on China.

Transcript

00:00Thank you. I now recognize Mr. Perry from Pennsylvania for five minutes of questions.

00:06I thank the chairman. Mr. Bishop, it's estimated that the U.S. has lost 3.7 million jobs since 2001,

00:16largely due to Chinese illegal trade practices. You know, they bypassed the trade rules, as you know,

00:22through shell companies, backdoor tactics. They still protected American intellectual property.

00:28And then they use that, the products to undercut American sales. Since 1981, the U.S. federal

00:35government, that's what China does, right? But since 1981, our government has issued at least,

00:41at least one manufacturing-related regulation per week since 1981. And that's a long list of

00:51regulations, which is, you know, quite honestly, it's played into China's hands,

00:57bringing our manufacturing to a standstill, which is what they love. Do you have any recommendations

01:03for where to start with onshore manufacturing dereguling? Like, where do we start? What's

01:11the highest priority? And then give us, like, a roadmap, if you have one, about how to deal with

01:17that? Thank you for the question. I mean, to this point, I mean, just the example of BYD

01:23that just came up, they didn't steal the technology for sure, but they were able to leapfrog us over

01:32the last five, six years, literally because American executive, ex-auto executives and consultants

01:36went over and gave them the playbook. I know this because I know a number of these ex-executives

01:43consultants. And one of the reasons that they're able to take ideas and then turn them into reality

01:49a lot faster is on the regulatory front. To your point, I think one of the things that we should

01:57be aiming the highest at, and is certainly on everyone's mind right now, is NEPA regulation.

02:02And again, as I said, the town that I'm from had a lot of rivers catching on fire in the 1970s.

02:08I'm for sure no fan of that. But I think we are so far away from where the pendulum has swung from

02:15those days to where now we have law firms making hundreds of millions of dollars a year

02:20just doing NEPA compliance regulation. If I had one thing to focus on, I think it would be

02:26a more common sense regulatory regime that is modern and built for the century that we're in,

02:35rather than something that was built in the 1970s. Well, as a person who's in the manufacturing

02:40business, we, I think, on this committee would like your specific recommendations on where to start,

02:47whether that's NEPA or something else, some things that are specific that plague us. Look,

02:54we got a lot of work to do, right? One a week since 1981. Obviously, I have a lot of work to do,

02:58but we need to start with some kind of prioritization and get after it. Mr. Power,

03:04China accounted for almost 15 percent of all U.S. imports in 2023. It's also the largest

03:12foreign supplier of critical technologies for the Department of Defense. Greg Hayes,

03:18the CEO of Raytheon, stated that it would be impossible for him to decouple from China due

03:24to the company's reliance on thousands of Chinese suppliers. Meanwhile, the Communist Party of China

03:29considers the United States of America and its businesses not strategic adversaries,

03:36not strategic competitors, but the enemy. What are the real world implications as you see them for

03:43America's warfighting capabilities if we don't change course? Thank you for the question, sir.

03:48In my opinion, we're on a five to eight year clock with China threatening Taiwan.

03:55And in the current state of the vast majority of defense manufacturing, the supply chains are so

04:01intermingled with rare earth minerals that produce magnets. Don't call them rare earth. They're not

04:07rare. They're critical, but they're not rare. There's plenty of them in this country. We're just

04:11not allowed to go get them, but carry on. That is correct, sir. I appreciate the clarification.

04:14Um, they are so intermingled that even, um, I'll give you a practical example is there's some

04:20components on the F35 program that, uh, the DOD gave an exception to so that there, I think it was

04:26a magnet is in the Chinese supply chain. And it's not just one part. It's not like a class of things

04:32like magnets. It's all over the place. And yes, it will take time to decouple. It is not a trivial

04:38thing to do. But in my mind, the only thing to do is pass legislation that says, if you're getting

04:43paid in America, you have to have your whole supply chain in America and let the economic

04:47system correct. Cause at this point they could shut off a lot of our critical programs, not

04:53to mention semiconductors, and we'd be flying completely blind and we would simply not have

04:57the productive capacity to make it past the first two weeks of a conflict.

05:01Mr. Chairman, I do.

05:04Thank you. I now recognize Mr.

05:06from

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Transcript

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