Other Contingencies

The report concludes that China is thinking beyond Taiwan. ``Analysis of China's military acquisitions and strategic thinking suggests Beijing is also developing capabilities for use in other contingencies, such as conflict over resources or disputed territories,'' it says.

Cyber Warfare

The report also says that China is increasing
its capabilities in space and cyberwarfare.

``In both those areas there's reason for concern,'' said David Sedney, assistant secretary of defense for East Asia.

The system will be operational in the next two to three weeks, he said.

He noted that no one in China ``picked up the phone'' when U.S. officials called after a B-2 bomber accidentally bombed the Chinese Embassy in Belgrade, Yugoslavia, in May 1999.