China is currently testing the world's most powerful naval gun and people with direct knowledge of a U.S. intelligence report say it will be ready for war by 2025.

Railguns use electromagnetic energy instead of gunpowder to propel rounds, and China's is capable of striking a target 124 miles away at speeds of up to 1.6 miles per second, according to the report. For perspective, a shot fired from Washington, D.C., could reach Philadelphia in under 90 seconds.

Railguns have long appeared on Russian, Iranian and U.S. military wish lists as cost-effective weapons that give navies the might of a cannon with the range of a precision-guided missile.

The rounds used in China's railgun cost between $25,000 and $50,000 each, according to the intelligence assessment. Though not an exact comparison since the weapons have different technologies, the U.S. Navy's Tomahawk cruise missile has an estimated price tag of $1.4 million each.

China's railgun was first seen in 2011 and underwent testing in 2014, according to people who spoke to CNBC on the condition of anonymity. Between 2015 and 2017 the weapon was calibrated to strike at extended ranges, increasing its lethality. By December 2017, the weapon was successfully mounted on a warship and began at-sea testing, a feat no other nation has accomplished.

The U.S. Navy's railgun, years away from being operational, remains a classified system still in development under the Office of Naval Research.

China's sprint to develop a weapon of this magnitude comes on the heels of Beijing's recent deployment of missile systems to fortified outposts in the South China Sea.

The railgun coupled with the new coastal defense systems represents a significant addition to China's military portfolio in one of the most contested regions of the world.