China shows growing capability to project military power beyond its shores, the Defense Department said Thursday.

In an annual report to Congress, the Pentagon said China is developing and testing new types of missiles, expanding the reach of its navy and upgrading its air force. China is also investing in military capabilities in cyberspace, space and electronic warfare.

The report said China’s military modernization was driven primarily by potential conflict in the Taiwan Strait, but also by its expanding interests and influence abroad, and increased tensions in the East China and South China seas. In November, China conducted its largest naval exercise to date in the Philippine Sea.

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