The Pentagon's report suggests the nature of China's armed forces is changing rapidly away from local self-defense toward strategic capabilities.
Beijing rejects criticism that the modernization is aimed at increasing China's weight across the region, and says the impressive array of weaponry is purely for defensive purposes.
China's official press has called the Pentagon report an attempt to mislead international opinion with falsehoods that is damaging to Sino-U.S. military relations.
The report points to the development of new long-range missiles capable of carrying a nuclear warhead to the United States, plus the ability to deploy those missiles on mobile launchers.
It also sees Chinese work on nuclear submarines capable of firing atom-tipped missiles from underwater, as well as modern aircraft. The submarines would have the ability to sail close to targets anywhere in the world to deliver a surprise attack. Each one of the 8,000-ton Russian-designed Jin-class vessels would be able to carry up to 16 missiles. A fleet of five is planned, which would make China the world's third most powerful country in this category of weapons, behind the United States and Russia.
However, senior analyst Shannon Kile of the Stockholm International Peace Research Institute says the submarine program seems to be running into development difficulties.
"This is a project which had a long and troubled development history," Kile says. "It's unclear how close the Chinese are to making this force operational. There have been reports in the last few years that they are fairly close, but there is other evidence to suggest that they are still some years away [from deployment]."
Another senior analyst, Jean-Philippe Beja of the Center for International Studies and Research in Paris, says Taiwan still appears to be the focus of China's defense efforts. This preoccupation has shaped Chinese thinking on defense for decades, and has not required strategic force projection.
"The Chinese army is still in the process of modernizing," Beja says. "It is very backward in comparison to say, the U.S. armed forces. So what the Chinese are saying is that they are only trying to keep up with the latest developments, that they have not changed their strategy, and, that being the case, they have no capability to project strength very far away."
Analyst Kile says it is too early to say whether the acquisition of the new arms is a modernization of China's military forces, or actually an expansion of those forces.
"What seems to be happening is that China is moving toward a more modern, survivable force -- that is to say, mobile land-based missiles and sea-launched missiles," Kile says. "It's completely unclear whether that means the force will be approximately the same size as at present, or will be considerably expanded over the next decade or so."
Not only is China aiming for big strides in military hardware, it has also moved forward rapidly on military-related space technology. Its spectacular interception of an orbiting satellite with a killer missile in January has worried the U.S. defense establishment.
The theme of the militarization of space has been taboo for decades. But China's unexpected experiment helps bring the subject to life again.