OODA Loop – The People’s Liberation Army (PLA), Global Supply Chains and Chinese Military-Civil Fusion (MCF)


As previously reported, the US DoD has embarked on a strategic transformation based on changes in organizational structure, putting nuclear back in the spotlight, a renewed commitment to US and allied military capabilities in the Indo region. -pacific, force-by-power in Europe (in the form of US and NATO military capabilities), and the maintenance of US superiority in conventional weapon technologies.

Supply chains are at the heart of this transformation. Specifically, an understanding and reduction of the dependence of US military systems on foreign components, subcomponents, materials and software. Supply chain security concerns were also reinforced by the Biden administration’s Supply Chain Disruption Task Force, which recently released its final report. Over the next year, supply chain security assessments are due for various industry sectors.

“Made in America” ​​is a goal, rectifying supply chain security concerns with components, subcomponents, materials and software made in the United States. And technology will play a role in tracking global supply chains and commodities using multiple data sources (geospatial, etc.) used to assess supply chain disruption and security, which can all be applied to military operations.

The prevalent problem for both the DoD and the private sector is the transparency, openness and subsequent vulnerability of US supply chains. In our decades of “hard work” to build the post-war economic order and market inroads that have become the global economy, we have tentacles of the global supply chain everywhere – with the dependencies and vulnerability that result from them.

The Chinese have the opposite problem: opaque supply chains, which will remain problematic or cause unforced errors on the part of the Chinese in their efforts to build a world-class military-industrial base on which to build 21st century military superiority. – just like the post office – The American industrial economy of World War II was the foundation of 20th century American military domination.

Military-Civil Fusion (MCF)

It turns out that supply chain transformation is a central military operational activity of the Communist Party of China (CCP) – and they want their supply chain to be “Made in America” as well.

The CCP calls this effort Military-Civilian Fusion (MCF). The Center for Advanced Studies (C4ADS) – a research NGO engaged in data and evidence-based research and analysis of global threats around the world – applied its non-traditional investigative techniques and emerging analytical techniques to generate a report on these CCPs. defense supply chain efforts. According to the report (titled Open Arms: Evaluating Global Exposure to China’s Defense-Industrial Base):

“Military-Civil Fusion (MCF) seeks to harness the sophistication and production of China’s civilian economy for the benefit of defense supply chains. The MCF brings Chinese companies into the defense economy… For the MCF to be successful, the PLA and the Chinese defense apparatus must radically change their opaque postures to operate in a market environment. The MCF is forcing Chinese defense supply chains to become increasingly transparent, creating visible indicators of participation in the defense economy that can be assessed using publicly available information (PAI) . It is in these “increasingly transparent… visible indicators” that we must look for China’s direct errors.

For the private sector, the threat is that the MCF’s effort will merge with Beijing’s already established policy of encouraging Chinese companies “to innovate by acquiring and adapting foreign technology” – what they call IDAR: “Introduce, digest. , absorb and re-innovate. “MCF merged with IDAR presents a growing need for the public and private sectors in the United States to be more vigilant in preventing the Chinese acquisition of ‘American Made’ technologies when considering a supply chain partnership with Chinese entities.

For now, the C4ADS report has used this potential crisis as an opportunity to leverage the currently available IAPs for a comprehensive analysis of activities that may speak to the inappropriate use of traditional means of Chinese commercial supply chains to an end. operational military supply chain. Again, according to the report:

“To do this, the report analyzes China’s defense ecosystem and the activities and characteristics of Chinese companies participating in military supply chains by:

Cartography: China’s defense industrial ecosystem using research from Chinese academics, international experts, Chinese official media, and policy documents

Exam : 8,430 military procurement announcements for trends in goods acquired by the Chinese military and offered by their suppliers

Analyzing: 65,727 import records and 429 investment transactions linked to a sample
of 1,655 companies linked to China’s defense industrial base

Diving: In three trade networks in China’s defense industrial base that present multiple risk signals and have international partners ”

The summary of the report highlights the results that the MCF and IDAR have already produced for the People’s Liberation Party:

  • The China South Rail case shows how PAI can be used to track how a trade deal was co-opted for military purposes.
  • The Beijing Highlander case illustrates how an openly pro-MCF company has historically developed technology with international partners for the PLA Navy and continues to do so.
  • The case of Bright Laser Technologies shows how relationships within the defense industrial base can lead to increased exposure to China’s defense supply chains.

Risk Signals: A C4ADS Risk Assessment Tool – and Actions to Take

For governments and companies alike that do business with the Chinese, this report is inventive and impressive, and deserves further consideration. The report includes a risk assessment tool for use when examining a business relationship with a Chinese company. In their conclusion to the report, the authors also present the sources and methods used by C4ADS to generate the report as an approach that governments and businesses should use to tackle this unique and very real threat vector in the chain. military / industrial supply.

Direct link to the C4ADS report: Open Arms: Evaluating Global Exposure to China’s Defense-Industrial Base

For more information on the rise of great power competition and DoD’s strategic transformation efforts, see OODA Loop – What the C-Suite Should Know About a Return to the Great Power Competition and DoD Capabilities ( according to the Congressional Research Service).

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