The Department of Defense must aggressively expand the Section 1260H list to identify and neutralize "hidden Huaweis"—Chinese companies embedded within critical U.S. supply chains under Beijing’s military-civil fusion strategy. While the 1999 mandate to track Chinese military firms was long ignored, recent updates now target essential technologies like LiDAR and optical transceivers. Chinese firms currently dominate these sectors, with Robosense controlling much of the LiDAR market and companies like InnoLight and Eptolink providing over 60% of the global optical transceiver supply. These components present severe national security risks, including potential firmware "kill switches" in data centers and malicious code in AI systems. Strengthening the 1260H designation process is vital to restricting federal procurement, redirecting private sector investment toward trusted alternatives, and preventing American capital from inadvertently financing China’s military modernization.
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