A new report by the U.S. Defense Department says China is continuing to increase its military capabilities in ways that have already altered the regional military balance and is causing concern about China's future intentions. The annual report is required by Congress.

The report says China is increasing its force of short range ballistic missiles that could attack Taiwan and other regional targets, and looking to buy or develop more advanced and capable aircraft and ships. The report says China is also increasing its high-technology ability to disrupt other countries' access to communications, computer networks and other services essential to modern defense, and society as a whole.

Peter Rodman

Assistant Secretary of Defense Peter Rodman says China appears to be preparing to project its military power beyond its immediate surroundings. "There are indications that they are thinking more broadly and at the very beginnings, perhaps, of developing power projection for other contingencies other than Taiwan," he said.

The report says such contingencies could involve conflicts over territory or resources. Last year's report on China came to a similar conclusion. But this year, the report adds that U.S. analysts have been 'surprised' by 'the pace and scope' of the modernization of China's strategic forces. And Rodman says Chinese officials are also discussing possible revisions in their defense doctrines, including their pledge not to be the first to use nuclear weapons in any conflict.

"What is interesting to us is the fact that there seems to be a debate going on there. As their capabilities improve it is possible to speculate that they may be looking at other options," he said.

Rodman says the United States accepts Chinese assurances that the 'no first use' doctrine is still in effect, but his concern on nuclear doctrine and China's growing military capability is for the future. "Certainly they have limitations now. We don't exaggerate their capability. And they, too, seem realistic about their capability. But they seem to have a very patient strategy of investment, planning, just growing over time. And five years from now, ten years from now, they can expect that maybe the balance of forces will be different than it is now," he said.

The assistant defense secretary says U.S. concerns are heightened because, although it has made some progress toward more openness, China continues to provide very limited information on its military programs and intentions, at a time when its military spending is increasing rapidly.

China analyst Daniel Blumenthal at the American Enterprise Institute, who used to handle China issues at the defense department, says U.S. policy has been to 'go slow' with China, and try to convince its leaders to use their growing power constructively. He supports that for now, but he says a more active U.S. response in terms of increasing its own military capabilities may be needed in the future. "At this point, I think we still need to push them into areas where we might gain cooperation, but I think that you also have to know when to say that that's not working, and be prepared to really balance against this military expansion," he said.

The U.S. government report says China continues to pursue an approach articulated by the late Chinese leader Deng Xiaoping, an approach that includes quiet development and hiding the country's true military capacity. Assistant Secretary Rodman says U.S. policy-makers keep that very much in mind. "It should be obvious from this report that we're watching pretty carefully and we know what we're dealing with," he said.

China strongly criticized last year's U.S. Defense Department report on its military. U.S. officials defended that report, saying it was factual and not inflammatory. This year, they say that while there is continuing cause for concern, there are only incremental changes to report.