First I want to say god speed to my brothers and sisters in arms and hope to join them again someday on the field of battle and secure freedom for those who cannot fight.
This is news to me. I am active duty and work logistics for the Army also Formerly on a Divsional Honor Guard and all flags we order and receive and used in burials are USA made. If there are flags being used made in China then the military is not providing those flags. More than likely it is a Contractor using the cheapest means possible for our fallen. I feel sadened if that is truly the case and that contractor should be reprimanded immediatly or contract revoked. When our fallen are covered in the nations colors it is not just a practice but it is a honor for that service member who gave thier life in a selfless act to help another people.
Side note I do know when the army switched to berets all chinese made berets were returned and never used in our Armed forces.