China criticized an annual U.S.
report on its military, with the state-run Xinhua News Agency citing
William Shakespeare in calling it “much ado about nothing.” A military spokesman said it “severely distorted the facts.”

The Pentagon report, released
Aug. 24, said China’s military continued to improve its capabilities for
a potential conflict with Taiwan “even as cross-Strait relations have
improved.” The goal is “to deter Taiwan independence and influence Taiwan to settle the disputes on Beijing’s terms,” the report said.

Yang Yujun, a spokesman for
China’s defense ministry, said the report played up China’s threat to
Taiwan. “China unswervingly adheres to the path of peaceful development,
and its national defense policy is defensive in nature,” Xinhua cited
Yang as saying.

The report to Congress is an
annual point of tension between the world’s two biggest economies, whose
leaders have pushed to improve military ties. The U.S. has the world’s
biggest military budget, with more than $600 billion in annual spending.
China’s defense spending ranks second in the world. This year China
plans to spend 601.2 billion yuan ($94.1 billion) on defense, the
government announced in March.

“For
many in China, it is weird that the Pentagon, whose expenditures reached
nearly 700 billion U.S. dollars and accounted for over an appalling 40
percent of the world’s total in 2010, routinely points its finger at
China, whose military only spends a small fraction of what the Pentagon
consumes every year,” the Xinhua commentary said.

The
commentary called U.S. claims that China’s naval expansion had
implications for regional power balances “utterly cock-and-bull.”

As of December, the People’s
Liberation Army had deployed between 1,000 and 1,200 short-range
ballistic missiles to units opposite Taiwan, said the Pentagon report,
including “missiles with improved ranges, accuracies and payloads.”

“Relations have continued to
improve over the past couple of years, but, despite this political
warming, China’s military shows no signs of slowing its effort to
prepare for a cross- Strait contingency,” Deputy Assistant Secretary of
Defense for East Asia Michael Schiffer told reporters at the Pentagon on
Aug. 24.

China’s military, besides its
Taiwan focus, is expanding its capability for missions as far away as
the Indian Ocean and further into the Pacific region, according to the
Pentagon.

“China’s sustained military
investments have allowed China to pursue capabilities that are
potentially destabilizing to regional military balances,” the report
said.

In
the past year, “China made strides toward fielding an operational
anti-ship ballistic missile, continued work on its aircraft carrier and
finalized the prototype of its first stealth aircraft,” the report said.

The report said the anti-ship
missile, the DF-21D, has a range exceeding 1,500 kilometers and a
maneuverable warhead designed to provide “the capability to attack large
ships, including aircraft carriers, in the western Pacific.”

Tensions rose last year after
the U.S. announced plans in January to sell $6.4 billion of missiles,
helicopters and ships to Taiwan, which China considers a renegade
province that should be reunited with the mainland by force if
necessary.

China broke off
military-to-military talks with the U.S. until late 2010, ahead of
visits by Gates to Beijing in January this year and Chinese President Hu
Jintao’s state visit to the U.S. that same month.

Chinese General Chen Bingde,
chief of staff of the People’s Liberation Army, visited the U.S. in May,
further driving efforts to improve ties.