USCC Cites DSET Policy Report in 2025 Annual Report to Congress on China’s Supply Chain Threats to Global Economic Security

The bipartisan U.S.–China Economic and Security Review Commission (USCC) submitted its 2025 Annual Report to Congress on November 18, 2025, and has since held a series of related hearings. USCC Vice Chair Randall Schriver, former Assistant Secretary of Defense for Indo-Pacific Security Affairs, also participated in a recent hearing.

The more-than-700-page report includes extensive analysis of China’s trade practices. In sections addressing China’s industrial subsidies and trade distortions, the USCC repeatedly cites the Research Institute for Democracy, Society, and Emerging Technology (DSET)’s policy report The Great Siege: The PRC’s Comprehensive Strategy to Dominate Foundational Chips, using DSET’s findings to assess the threat that China’s mature-node semiconductor subsidies pose to democratic allies.

In Part 4 – Exposure to China’s Economic Distortions and Coercion, the USCC analyzes the effects of China Shock 2.0, noting that the influx of heavily subsidized Chinese manufactured products has inflicted serious damage on industries across both developing and advanced economies. The report warns that U.S. national security is also increasingly vulnerable due to heavy dependence on Chinese supply chains.

DSET’s work is specifically cited in Chapter 9 – Chained to China: Beijing’s Weaponization of Supply Chains. The USCC highlights that beyond already weaponized critical minerals, the United States relies heavily on China for active pharmaceutical ingredients (APIs), printed circuit boards (PCBs), and foundational (mature-node) semiconductors. The Commission underscores that although much policy attention is directed toward leading-edge chips, foundational chips above the 28 nm node size remain essential to modern economies and militaries.

The USCC also references DSET’s April 2025 report, which details Beijing’s long-term strategy to build a state-directed “pseudo-IDM” ecosystem across mature-node semiconductor segments—including critical materials, silicon wafers, and silicon carbide—through massive subsidies, industrial policy intervention, and aggressive price suppression. The report notes that China seeks to leverage below-cost pricing and its domestic market to reshape global supply chains and alter competitive dynamics.

The Annual Report further explains, using graphics and data, that China’s economic model has concentrated global production capacity and institutionalized economic coercion tools, including its increasingly proactive use of export controls since late 2023. The Commission states that China is shifting from reactive retaliation to active deterrence, with the aim of limiting other countries’ policy choices.

In the section “Taiwan and Hong Kong,” Chapter 11 – Taiwan, the USCC states that the chapter’s findings are:

“based on meetings with the Taiwan Economic and Cultural Representative Office; the KMT Representative to the United States; the American Institute in Taiwan; and the Research Institute for Democracy, Society, and Emerging Technology as well as open source research.”

The chapter again cites DSET’s analysis to show how China’s state-backed expansion is already eroding global competition. The USCC highlights that China has captured 80 percent of the market share of foundational semiconductors used in solar panels, 73 percent in electric vehicles, 66 percent in display panels, and 56 percent in mobile phones. The report also notes projections that China’s share of global foundational chip production will rise from 34 percent in 2024 to 47 percent by 2027, and may exceed 50 percent by 2030.

The USCC further cites data that increased competition from China contributed to a decline in Wolfspeed’s global market share, which fell from 62 percent in 2021 to 33 percent in 2023. The Annual Report additionally references estimates indicating that China could surpass Taiwan’s mature-node semiconductor production capacity as early as 2027, and may reach nearly 50 percent of global foundational chip production by 2030.

DSET stated that its research aims to alert democratic partners to the risks posed by China’s industrial policies, encourage coordinated countermeasures among allies, and strengthen cooperation with Taiwan. DSET welcomes the USCC’s formal citation of its findings in the Annual Report to Congress and hopes that both the U.S. and Taiwanese governments will draw on the report’s recommendations to advance further policy collaboration.