Due to be released later Friday, the report calls for targeted investments in domestic manufacturing to eliminate vulnerabilities in the Pentagon's supply chain that could pose a risk to national security.

While it bemoans the Pentagon's reliance on parts from several nations, the document focuses largely on China, assailing Beijing for its "economic aggression" and stranglehold on certain markets.

"China is the single or sole supplier for a number of specialty chemicals used in munitions and missiles," states the 146-page report that President Donald Trump commissioned more than a year ago.

"In many cases, there is no other source or drop-in replacement material and even in cases where that option exists, the time and cost to test and qualify the new material can be prohibitive."

The study also decries "antiquated and counter-productive" Pentagon procurement practices that have caused delays, discouraged innovation and increased costs to suppliers.

China's "aggressive industrial policies" have already impacted some critical capabilities, including solar cells for military use, flat-panel aircraft displays and the processing of rare earth elements, the report states.

"China's actions seriously threaten other capabilities, including machine tools; the production and processing of advanced materials like biomaterials, ceramics, and composites; and the production of printed circuit boards and semiconductors," it adds.

Trump is due to officially unveil the report on Friday and sign a related executive order.

The report draws on themes that are now key to the Trump administration's China doctrine, blasting Beijing for intellectual property theft and its forcing of US firms to offshore their research and development in exchange for access to the vast Chinese market.

On Thursday, Vice President Mike Pence accused China of military aggression, commercial theft and rising human rights violations as he cast the Asian power as a villain bent on interfering in upcoming US elections.

China hit back furiously on Friday, branding Pence's accusation as "ridiculous," groundless and slanderous.

According to a report by Bloomberg News on Thursday, the Chinese military inserted tiny chips in US computer equipment manufactured in China, part of a vast effort by Beijing to steal US technology secrets.

The chips, the size of a grain of rice, were reportedly used on equipment made for Amazon, which first alerted US authorities, as well as Apple and possibly for other companies and government agencies including the military.