Relations between the world's two most powerful countries descended a notch this week with Wednesday's publication of the latest annual Pentagon report on China's future military capabilities.

The report depresses the mood between the two countries slightly after what was considered a successful good-will tour by US Vice-President Joe Biden.

According to the United States Defense Department, China is re-tooling one of the world's most powerful armies much faster than expected - at a time when defense budgets are being cut in almost all other industrialized nations.

Despite "large quantities of antiquated hardware and a lack of operational experience," the US report said China's People's Liberation Army (PLA) is closing the technological gap with modern military forces.

This year's theme: the sea

Jonathan Holslag, research fellow at the Brussels Institute of Contemporary China Studies (BICCS), notes a new focus in the report. "What I found interesting is the emphasis on China's growing aspirations at sea," he told Deutsche Welle. "Each year the report has a sort of highlight, and this year it was China's ocean-going ambitions."

Among the major new developments the Pentagon noted was the launch of China's first aircraft carrier for a maiden run earlier this month. Such measures significantly increase the reach of the Chinese military, and make it able to protect its interests around the world.

The ship is a refitted former Soviet craft, but the report said China could begin construction of a fully indigenous carrier in 2011 that could be operational after 2015. "China likely will build multiple aircraft carriers with support ships over the next decade," the Pentagon declared.

The report also says the January test flight of China's stealth fighter jet, the J-20, "highlights China's ambition to produce a fighter aircraft that incorporates stealth attributes, advanced avionics and super-cruise capable engines over the next several years."

The US believes the J-20 will eventually give the PLA Air Force a platform capable of long-range, penetrating strikes into complex air defense environments.

But China's program to develop JL-2 submarine-launched ballistic missile, which has an estimated range of some 4,600 miles (7,400 km) has faced repeated delays. The Pentagon had forecast it would achieve initial operating capability by 2010.

"Cock-and-bull"

While the Chinese government is yet to respond officially, the signals from state-run news agency Xinhua suggest the leadership are not particularly impressed with the Pentagon's warnings.

"The allegation is an utterly cock-and-bull story about the Chinese military based on a wild guess and illogical reasoning," an English-language Xinhua commentary said. "China, which has adhered to a defensive military policy, with its rising economic clout and sprawling commercial and strategic interests around the world, has every right to build a competent military."

There was also a hostile response from China's embassy in Washington, which described the report as "a reflection of cold war mentality" and would be used as a tool to depict China as a threat.

Jonas Parello-Plesner, senior policy fellow at the European Council on Foreign Relations, notes a familiar theme. "It's a bit of a yearly rhetorical ritual," he told Deutsche Welle. "The US has been making this report since 2000, and the Chinese always have an official reaction to it."

"Essentially, the US is facing a rising power," says Holslag. "China is in a similar position to the US in the 19th century, when they had growing international security interests, and a highly uncertain, if not threatening environment. That's what this report portrays for me."

Stand-off over Taiwan

The Pentagon also used the report to flag concerns about Beijing's widening military edge over Taiwan, the self-ruled island that China calls an illegitimate breakaway province.

China cut off ties with the US military for most of last year to protest at an American arms package for Taiwan, but Taiwanese officials have been outspoken about their continued need for US weapons. The US is still agonizing over whether or not to sell a batch of F-16 fighter jets to Taiwan at a time when there is a leadership change looming in China.

The Pentagon report says that the PLA had deployed between 1,000 and 1,200 short-range ballistic missiles to units opposite Taiwan by the end of last year, and the possibility of conflict remains a long-term focus.

As far as the Pentagon is concerned, China's increased military capability spells instability in the Asia-Pacific region, but Holslag says it's not necessarily that simple. "There's a difference between commissioning all sorts of new systems and being able to deploy them in a reliable way," he said.

And anyway, as Parello-Plesner points out, the US military power is still far superior to anything else in the region: "If you take the number of aircraft carriers, the US will be the force to be reckoned with in Asia for years to come," he said. China's ambitions are therefore fairly limited. "It is not necessarily about winning battles against US aircraft carriers, but possibly denying access for US aircraft carriers," says Parello Plesner.

"I think China's economic rise and military modernization is definitely triggering more strategic uncertainty," Holslag admitted. "But I think as long as you have some basic balance of military power between China and the US - as an off-shore power in a dense network of alliances - there will be some sort of stability. The Chinese understand very well that it will be very risky to overplay their hand."

Japan and India have plans too

It seems clear that the US presence is keeping China's power in check for now, but what about the long-term? "A lot of Asian countries ask whether the US will be able to maintain its presence in the western Pacific, for instance, because of its financial strains," says Holslag.

"But there are also questions over the degree to which Japan and India want to follow a more independent course, which would counter-balance China in the distant future," he added. "That could also create regional stress. I'm not sure we will face an entirely different world by 2020, in terms of military capability, but what is sure is that Asia's strategic landscape is going to be profoundly changed."

Author: Ben Knight
Editor: Rob Mudge