Yes, it's bad because "naval strategy is build strategy", and all of that industrial activity and technical know-how exported to China has facilitated the buildup of a massive, modern, increasingly-blue-water Navy and supporting Air Force that is postured specifically to challenge the US. The US Navy's global presence and open sealane patrolling is key to enforcement of the Petrodollar system, and therefore one of the lynchpins of American economic hegemony. Eventually China will challenge the US, and the US will either back down or lose. Either way, expect the global order to change, the Petrodollar to go away, and the US economy to collapse....and we'll have basically spent 30+ years making down-payments on our own destruction.

At least that's the theory.