Yes, productive capacity can be repurposed to support military goals - with organizations and technicians already in place.

Mexico has about 1/17th of the manufacturing capacity of the US - adds around 5.8%. America has a labor shortage in manufacturing, which is unlikely to be filled with foreign workers given the current crackdown on brown people. They're also annihilating their intellectual capacity by again cracking down on brown people, and defunding universities.

China is already leading the world in manufacturing and expanding rapidly, their universities are world class, and they have almost caught up in technology. Given their investments in education and strong culture of academic achievement, it's unreasonable to think they won't overtake the US in every domain in the next 3-5 years.