2012-05-22 (China Military News cited from businessweek.com) — China’s government has failed to curb manufacturing of counterfeit military electronic parts by Chinese companies that are the “dominant source” of fakes in the U.S. defense supply chain, a Senate investigation found.
The U.S. Air Force suspended in January a Shenzhen, China- based company from supplying parts to U.S. contractors after it sold about 84,000 suspect components, many of them installed on U.S. aircraft, according to an example cited in the U.S. Senate Armed Services Committee report released yesterday.
The panel’s report outlines the results of a 14-month investigation disclosing dozens of examples of suspected counterfeit electronic parts. Saying U.S. companies and the military services didn’t crack down on abuses, the committee said the defense industry “routinely failed to report cases of suspect counterfeit parts, putting the integrity of the supply chain at risk.”
The report didn’t cite any examples of counterfeit parts causing damage such as lives lost or planes that crashed.
The committee said it found “overwhelming and undeniable evidence to support” the conclusion that China hasn’t taken steps to stop operations “that are carried out openly in that country.”
“Rather than acknowledging the problem and moving aggressively to shut down counterfeiters, the Chinese government has tried to avoid scrutiny, including denying visas to committee staff to travel to mainland China as part of the investigation,” according to the report.
Geng Shuang, a spokesman at the Chinese embassy in Washington, didn’t respond to an e-mail yesterday seeking comment.
The Senate committee’s investigative staff amassed a database with 1,800 cases of counterfeiting involving about 1 million parts. It scrutinized 100 cases and found that 70 percent of the suspect parts were traced to Chinese companies. The U.K. and Canada followed China, based on the resale by companies in those countries of parts from China, according to the report.
The “vast majority of the 1,800 cases appear to have gone unreported to the Defense Department or criminal authorities,” the report found.