WASHINGTON (Washington Post) -- China's defense spending is far outpacing that of other nations in its region, and its aggressive development of ballistic and cruise missiles and attack submarines threatens to upset the balance of power in Asia and beyond, according to a Pentagon report released yesterday.

China's official military budget grew nearly 18 percent in 2008 to $60 billion, although the Pentagon estimates spending at $105 billion to $150 billion. Its 2005 military budget was 10 times as high as the 1989 budget, and if current trends continue, the 2009 budget will nearly double the 2005 figure, according to the report, mandated annually by Congress.
The report indicates that uncertainty over Beijing's intentions in modernizing its military is a source of concern. “Given the apparent absence of direct threats from other nations, the purposes to which China's current and future military power will be applied remain uncertain,” says the 66-page report.
The report also says China's People's Liberation Army is acquiring large numbers of “highly accurate” cruise missiles and modernizing its long-range ballistic missile force by making it more mobile and, therefore, more secure.
“China has the most active land-based ballistic and cruise missile program in the world,” it states. China continues to build up an arsenal of short-range missiles along its coast opposite Taiwan, despite what the report described as an easing of tensions across the Taiwan Strait over the past year, said a Pentagon official, who spoke on the condition of anonymity according to ground rules set by the Pentagon.
The longer-range DF-31A missile, deployed in 2007, has a range of almost 7,000 miles and “can target any location in the continental United States,” the report says, although the defense official said China has publicly committed to a policy of no first strike.
Naval forces are another area that China is seeking to develop to project military power farther from its shores, the report says.
For example, it is conducting research and training related to a program to develop aircraft carriers, with construction of an indigenous ship possible by the end of the decade, it says. China is also expanding its fleet of attack submarines.
The Pentagon report for the first time mentions construction of a naval base on the southern island of Hainan that “appears large enough to accommodate a mix of attack and ballistic missile submarines and advanced surface combatant ships.”
“The port, which has underground facilities, would provide the PLA Navy with direct access to vital international sea lanes, and offers the potential for stealthy deployment of submarines into the deep waters of the South China Sea,” it says.
China's emerging cyberwar capabilities are also troubling to the Pentagon, the official said.
The report notes that in 2008, computer system intrusions that appeared to come from China targeted U.S. government computer systems as well as others around the world. “Although these intrusions focused on exfiltrating information, the accesses and skills required for these intrusions are similar to those necessary to conduct computer network attacks,” it said.
The U.S. government is also investigating whether Chinese officials secretly copied the contents of an American government laptop computer during a visit to China by the U.S. commerce secretary.