For portions of the U.S. defense industry, China's military rise is viewed as an opportunity. As Beijing develops and fields more advanced defenses, the U.S. plans to respond with new spending on air, naval, missile defense and cyberforces. Indeed, this was underscored by the U.S. strategy pivot to Asia that was unveiled in January. But China's rise could also pose three challenges to U.S. defense companies in ways that may not be currently appreciated or understood.