China is developing "disruptive" technologies for nuclear, space and cyber warfare that are altering Asia's military balance, the Pentagon said in a report on Wednesday.
"China's ability to sustain military power at a distance remains limited," the Defense Department said in its annual report to Congress on Beijing's military power.
"But its armed forces continue to develop and field disruptive military technologies, including those for anti-access/area-denial, as well as for nuclear, space, and cyber warfare, that are changing regional military balances and that have implications beyond the Asia-Pacific region."
China's lack of transparency in reporting military spending and security policy "poses risks to stability by creating uncertainty and increasing the potential for misunderstanding and miscalculation," the Pentagon said.
China maintains its military spending is purely for defensive purposes, which the Pentagon noted.
The report comes after a naval stand-off earlier this month in the South China Sea, in which Washington said Chinese vessels harassed a US surveillance ship.
China rejected the US account and accused the United States of spying in what it considers an "economic exclusion zone."
China announced plans a year ago to increase its military budget by nearly 18 per cent.