Chinese manufacturers put dubious electronic parts into the U.S. defense supply chain and their government covered it up, according to a Senate report analyzed by Bloomberg:
"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.
Asked to comment on the report, Chinese Foreign Ministry spokesman Hong Lei said the U.S. should conduct a "thorough investigation" into the sellers of the parts and the types of deals involved."
Despite findings of more than 1,800 cases of faulty parts being installed in military and commercial aircraft, the U.S. military only scrutinized 271 of those cases.
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 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."
This report comes on the heels of the $100 million lawsuit Burberry recently won against Chinese counterfeiters for selling bogus bags.