Chinese bombers are much more active and operating farther from Chinese shores at an increased frequency, and the Pentagon thinks they are likely training for strikes on usa targets, according to the 2018 China Military Power Report.
China has not yet commented on the report.
The report said China could increase its spending to $240 billion by 2028, The Guardian reported.
Even before the new report's release, Washington was feeling the full brunt of the Chinese military's fury over a new $717 billion U.S. defense bill which encourages closer cooperation with Taiwan to counter Beijing.
"Over the last three years, the People's Liberation Army (PLA) has rapidly expanded its overwater bomber operating areas, gaining experience in critical maritime regions and likely training for strikes against USA and allied targets".
The revelations come in the Pentagon's 2018 report to Congress on "Military and Security Developments Involving the People's Republic of China" which focuses on developments in 2017.
A report from the Pentagon now claims the country is "likely" training pilots for missions that would directly target the United States.
The new report said that China's space program "continues to mature rapidly" and is also developing counterspace capabilities to "degrade and deny adversary use of space-based assets during a crisis or conflict".
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The China Securities Journal - a Chinese state-run financial newspaper - said in 2016 that China could build as many as 20 floating nuclear plants to "speed up the commercial development" of the South China Sea, the South China Morning Post reported a year ago.
The document also warns that China "is likely preparing for a contingency to unify Taiwan with China by force".
-China tensions over trade, was contained in an annual report that highlighted China's efforts to increase its global influence, with defense spending that the Pentagon estimates exceeded $190 billion in 2017. China has reclaimed 3,200 of acres of land in the Spratly Island chain and added with ports, runways and other military infrastructure.
The report comes as China and the United States plan to hold trade talks, offering hope they might resolve an escalating tariff conflict that threatens to degenerate into an all-out trade war.
"The deployment and integration of nuclear-capable bombers would, for the first time, provide China with a nuclear "triad" of delivery systems dispersed across land, sea, and air", the report said.
In June, U.S. Defense Secretary Jim Mattis became the first Pentagon chief to visit China since 2014.
"The PLA continues to strengthen its military space capabilities despite its public stance against the militarization of space", it said.
Mr Trump has long complained of the USA trade deficit with China and has championed tariffs as a way to strike "great new trade deals". Five other countries - including the Philippines and Vietnam - also have claims in the waters, which have led to clashes over fishing rights and energy exploration.