The Chinese government reacted strongly on Friday to a Pentagon report that warned China's military modernization could destabilize the Asia-pacific region.

The Chinese Defense Ministry says, the US military's annual assessment of China's armed forces , indulged in exaggeration and groundless suspicion.

Beijing and Washington have sought to rein in their quarrels this year, and a recent visit to China by Vice President Joe Biden brought vows of cooperation and goodwill.

But military wariness between the two powers remains a source of tension. And the recent US Defense Department Report once again underlines this.

The annual report, presented to the Congress on Wednesday, addressed the current and future course of military development of the Chinese People's Liberation Army, China's security and military strategy, and US-China military ties.

Michael Schiffer, the deputy assistant secretary of defense for East Asia, says the United States is "uncertain about how China will use its growing capabilities."

"The pace and scope of China's sustained military investment have allowed China to pursue capabilities that we believe are potentially destabilizing to regional military balances, increase the risk of misunderstanding and miscalculation, and may contribute to regional tensions and anxieties."

But according to Yang Yujun, China's Defense Ministry spokesman, China's military is only to protect the national sovereignty and territorial integrity. It's not aimed at any particular country or region.

The Pentagon report predicts that by 2020, the PLA will become a "modern, regional-focused military", and claims that the Chinese mainland is focusing its military buildup on Taiwan.

But Yang Yujun replied saying that as technology advances, it's very normal for the Chinese military to develop and upgrade its weaponry. The Pentagon report merely "exaggerated the so-called mainland military threat to Taiwan."

The annual assessment said cyber attacks in 2010, including those on US government computers, appeared to have originated in China. China slammed that claim and said the US is "engaged in groundless suspicion about China's out-space and Internet security policies."

But there were more positive comments compared to previous years. For example, the report says China has made "modest, but incremental, improvements in the transparency of its military and security affairs."

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