Are we entering the critical phase in the Great Power competition between America and China?

The answer seems to be affirmative, based on a new Pentagon report released recently.

The report — submitted to Congress by the Department of Defence and titled Military and Security Developments Involving the People's Republic of China — provides new insights into China's military restructuring and more aggressive posture in the Indo-Pacific region.

Given its importance, all countries in the region ought to take notice.

Predictably, some of the coverage in the American media has been breathless — seemingly surprised at the idea that America's great rival is training for a military conflict with it.

Surely, if American military preparedness is based upon a potential conflict with China, it shouldn't be news that China thinks the same way.

Greatest transformation

The People's Liberation Army embarked on the greatest transformation in its history last year. ( Reuters )

So, what did the Pentagon's assessment find? Here are the key insights.

First, in 2017, the People's Liberation Army embarked on the greatest transformation in its history. This was both structural and operational.

The objective is "to create a more mobile, modular, lethal ground force capable of being the core of joint operations and able to meet Xi Jinping's directive to 'fight and win wars'."

Second, China's military modernisation seeks "capabilities with the potential to degrade core US operational and technological advantages".

Clearly, in China's eyes, the US is threat number one. And China employs both legal and non-legal means to advance its modernisation goals: "Targeted foreign direct investment, cyber theft, and exploitation of private Chinese nationals' access to these technologies."

Takeaway: China is closing the technological gap with the US.

US ally Australia in range of Chinese missiles

Australia is within range of China's nuclear-capable DF-26 3 missiles. ( Reuters: Andy Wong )

Third, China's military posture is predicated on the maritime domain being a significant location for conflict with the US.

The report notes: "The PLA has rapidly expanded its overwater bomber operating areas, gaining experience in critical maritime regions and likely training for strikes against US and allied targets."

The PLAN Marine Corps (PLANMC) is being expanded from 10,000 to 30,000 personnel by 2020 with a larger mission beyond its current focus on the South China Sea. Critically, strike capabilities are expanding to cover US and allied targets in the region.

The report acknowledges the "PLA …[demonstrates] the capability to strike US and allied forces and military bases in the western Pacific Ocean, including Guam. Such flights could potentially be used as a strategic signal to regional states".

The US and allies such as Australia are within range of Chinese missiles.

For instance, Australia is within range of the nuclear-capable DF-26 and CSS-3 missiles.

China's strategy to avoid dramatic conflict

Fourth, China's preferred strategy is to avoid dramatic conflict. Instead, it uses "opportunistically timed progression of incremental but intensifying steps to attempt to increase effective control over disputed areas and avoid escalation to military conflict."

It combines these incremental measures with economic diplomacy — buying silence and seeking accession. The report documents numerous such instances against the Philippines, Vietnam, and South Korea.

China probably has the ability to destroy satellites in space, the report notes. ( Supplied: NBN Co )

Fifth, China wishes to make "major progress" toward "informatisation" — a concept "roughly analogous to the US military's concept of "net-centric" capability: a force's ability to use advanced information technology and communications systems to gain operational advantage over an adversary".

Sixth, China employs cyber attacks to achieve key strategic goals. These include "intelligence collection against US diplomatic, economic, academic, and defence industrial base sectors".

The intelligence is then used "to benefit China's defence high-technology industries, support … military modernisation, provide the CCP insights into US … [and] enable PLA cyber forces to build an operational picture of US perspectives".

In addition, it provides knowledge about "defence networks, military disposition, logistics, and related military capabilities that could be exploited prior to or during a crisis".

Seventh, China's military ambitions extend to space: it wishes to acquire "counterspace capabilities, including kinetic-kill missiles, ground-based lasers, and orbiting space robots, as well as to expand space surveillance capabilities that can monitor objects across the globe and in space and enable counterspace actions."

The report notes that China probably has the ability to destroy satellites in space.

Nuclear 'triad' of delivery systems

Eighth, China's nuclear deterrence is evolving to encompass a triad of delivery capabilities. The DOD records that "nuclear capable bombers would, for the first time, provide China with a nuclear 'triad' of delivery systems dispersed across land, sea, and air."

In addition, the country "is developing a stealthy, long-range strategic bomber with a nuclear delivery capability that could be operational within the next 10 years".

Further, China's no-first use policy regarding nuclear weapons is ambiguous. Although it claims it will never use nuclear weapons first, the no-first use policy may not apply if targets that are necessary for nuclear deterrence are attacked, for example.

China's first entirely home-built aircraft carrier began sea trials earlier this year. ( Xinhua: Li Gang )

Ninth, China's Belt and Road Initiative (BRI) is central to its power aspirations.

As the report bluntly notes, "China intends to use BRI to develop strong economic ties with other countries, shape their interests to align with China's, and deter confrontation or criticism of China's approach to sensitive issues".

Obviously, "some BRI investments could create potential military advantages for China," particularly in the naval context.

China is also likely "to establish additional military bases in countries with which it has a longstanding friendly relationship and similar strategic interests, such as Pakistan".

Sri Lanka should take note.

Beware Chinese gifts

The report documents that the PLA's likely preparing for a contingency to unify Taiwan. ( Reuters )

Finally, China has not ruled out the military option for reunifying Taiwan.

Chillingly, the report documents that the "PLA … [is] likely preparing for a contingency to unify Taiwan … by force, while simultaneously deterring, delaying, or denying any third-party intervention on Taiwan's behalf".

While none of this is surprising, the level of detail provided in the report offers a clear look at China's escalating ambitions.

It also showcases China's unmistakable savvy in preparing for any eventuality across the full spectrum of conflict locales — investing in technology leadership, expanding military space capabilities, developing indigenous aircraft carriers, leading in international peacekeeping/counter-piracy missions to gain operational knowledge, developing informatisation and cyber attack capabilities, developing both larger range missiles and missile defence, and expanding nuclear weapons delivery possibilities in the event of a first strike.

The report also offers lessons for states in the region seduced by China's economic goodies — there is no free lunch and Chinese gifts might be followed by military commitments.

Dr Sandeep Gopalan is the pro vice-chancellor for academic innovation at Deakin University and a professor of law.