The military advances portend that China will close the technological gap with the major world powers by 2020 and would be able to flex its muscle in the Pacific and beyond.
"The pace and scope of China's sustained military investment have allowed China to pursue capabilities that we believe are potentially destabilising to regional military balances, increase the risk of misunderstanding and miscalculation, and may contribute to regional tensions and anxieties," Michael Schiffer, the Deputy Assistant Secretary of Defense for East Asia said while releasing the Pentagon's annual report on China's military capabilities.
The report said that China's People's Liberation Army (PLA)- with some 1.25 million ground troops, the largest in the world- was on track to achieve its goal of building a regionally focused force by 2020.
It said that China was developing its own aircraft carriers and plans where to have a four carrier task force by 2020. Beijing was also far advanced on work to develop a new generation stealth fighter, the J-20, whose first test had been undertaken in January.
Over the years, Pentagon said China had developed longer range missiles including anti-ship ballistic missiles, potentially capable of attacking American aircraft carriers, which would give Beijing capabilities to strike all regional air and military bases in Asia and Pacific.
Pentagon said that China had developed advanced capability for cyber warfare as it noted that numerous intrusions into computer system around the world in 2010 appeared to have originated in China.
The US report estimated that China's total military spending for 2010 was more than USD 160 billion, but still far short of US which spends USD 500 billion a year.
Schiffer, releasing the report said, "Such capabilities could increase Beijing's options for using military force to gain diplomatic advantage, advance its interests or resolve military disputes in its favour".
"China's expanding military capabilities have enabled it to contribute to the delivery of international public goods, from peacekeeping and counter-piracy to humanitarian assistance and disaster relief," he said.
Responding to questions on the recent test by China of its aircraft carrier, Schiffer said this was a development that the Chinese have been working on for a number of years.
"Whether or not this proves to be a, a net plus for the region or for the globe or proves to be something that has destabilising effects and raises blood pressure in various regional capitals, I think that remains to be seen; and again, not to sound like a broken record, but underscores the importance of being able to have those dialogues that allow us to reach greater strategic understanding and aim for a degree of strategic trust, not just between the US and China, but China and its other neighbours as well," he said.