China is exploiting Western commercial technology, conducting aggressive cyber espionage and buying more anti-ship missiles as part of a steady military build-up, according to the Pentagon.
Beijing aims to take advantage of "mostly US" defense-related technologies in the private sector in a concerted effort to modernize the country's armed forces and extend China's reach in the Asia-Pacific region, the Pentagon wrote in a report to Congress on Friday.
The annual assessment of China's military resembled previous reports but adopted more diplomatic language, possibly to avoid aggravating delicate relations with Beijing, analysts said.
"I am struck by the decidedly mellow tone," Christopher Johnson of the Center for Strategic and International Studies told AFP.
Chinese officials are sure to privately welcome the report's wording, after having been irritated by a strategy document issued by President Barack Obama in January that portrayed China as a military rival.
"This is much friendlier" than the January strategy paper, Johnson noted.
The report said Beijing had a goal of leveraging "legally and illegally acquired dual-use and military-related technologies to its advantage."
"Interactions with Western aviation manufacturing firms may also inadvertently benefit China's defense aviation industry," the Pentagon warned.
Echoing recent warnings from intelligence officials, the Pentagon also blamed China for "many" of the world's cyber intrusions over the past year targeting US government and commercial networks, including companies "that directly support US defense programs."
The report warned that "Chinese actors are the world's most active and persistent perpetrators of economic espionage," and predicted that those spying efforts would continue.
China's investments in cyber warfare were cause for "concern," said David Helvey, acting deputy assistant secretary of defense for East Asia and Asia Pacific security affairs.
Beijing was clearly "looking at ways to use cyber for offensive operations," Helvey told reporters.
The American military has long worried that China could potentially limit the reach of US naval ships in the western Pacific with new weapons, and the Pentagon report underlined those concerns.
China "is also acquiring and fielding greater numbers of conventional medium-range ballistic missiles (MRBMs) to increase the range at which it can conduct precision strikes against land targets and naval ships, including aircraft carriers, operating far from China's shores beyond the first island chain," said the report.
Beijing is pouring money into advanced air defenses, submarines, anti-satellite weapons and anti-ship missiles that could all be used to deny an adversary access to strategic areas, such as the South China Sea, it said.
US strategists -- and some defense contractors -- often refer to the threat posed by China's so-called "carrier-killer" missiles, but Helvey said the anti-ship weapons currently have "limited operational capability."
China's military budget officially reached $106 billion in 2012, an 11.2 percent increase.
But the US report said China's defense budget does not include major expenditures such as improvements to nuclear forces or purchases of foreign-made weapons. Real defense spending amounts to $120 to $180 billion, the report said.
US military spending, however, still dwarfs Chinese investments, with the Pentagon's proposed budget for 2013 at more than $600 billion.
Despite a sustained increase in defense spending over the past decade, China has experienced setbacks with some satellite launches and ambitious projects to produce a fifth-generation fighter jet and modern aircraft carrier still face challenges, according to the report.
Although looking to expand its traditional missions to include counter-piracy and humanitarian efforts, the top priority of the People's Liberation Army remains a possible conflict in the Taiwan Strait.
The report said China is focused on preventing the United States from intervening successfully in support of Taiwan.
The document was released as the House of Representatives voted to force the US government to sell 66 new fighter-jets to Taiwan.
President Barack Obama's administration, anxious to keep ties with China on track, is only planning to upgrade existing planes. The measure still needs Senate approval.
