It is building and testing second generation nuclear submarines, including ballistic missile subs and attack subs. Russia also delivered the last two of eight Kilo-class submarines equipped with supersonic anti-ship cruise missiles and sophisticated torpedoes.
Beijing's latest Luzhou class ships will be designed with surface-to-air missile systems that more than double the range of current PLA air defense systems.
China also began production of its first guided-missile frigate.
More than 700 Chinese combat aircraft are now within range of Taiwan without the need to refuel, and airport capacity can expand the number "significantly."
The Air Force is deploying the F-10 multi-role fighter to operational units. The F-10 will be "China's premier fighter in the coming decades."
Chinese aircraft are armed with "an increasingly sophisticated array of air-to-air and air-to-surface weapons, satellite and laser-guided precision munitions, and cruise missiles," the report said.
The PLA has deployed a new amphibious assault vehicle that "has greater stability and performance in open water. Increased amphibious training ... is building proficiency among China's amphibious forces," it said.
"China's military modernization and the deployment of advanced capabilities opposite the island have not eased, with the balance of forces continuing to shift in the mainland's favor," the report said. "Tensions could also increase as Taiwan prepares for its next presidential election."
The Pentagon takes some solace in the fact that Taipei appears ready to boost its defense spending after years of declining funding.
RSS