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DOD Issues Annual China Report: China’s ability to sustain military power at a distance remains limited and its near-term focus remains on preparing for contingencies in the Taiwan Strait, including the possibility of US intervention, the Defense Department writes in its annual report to Congress on Chinese military power issued Monday. However, “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,” the report reads. Indeed the pace and scope of China’s military transformation “are changing East Asian military balances” and improvements in China’s strategic capabilities “have implications beyond the Asia-Pacific region,” DOD writes. A chief concern remains China’s lack of transparency in its military and security affairs, which raises “the potential for misunderstanding and miscalculation” and will drive others “naturally and understandably” to hedging against the unknown, it states.