Washington, Aug 25: The United States has said that China's rapid military buildup is a cause of concern and warned that it would increase the risks of misunderstandings and miscalculations between both nations.

In its recently unveiled annual report on China''s military, the Pentagon warned Beijing has closed critical technological gaps and is rapidly modernizing its military equipment, all with an eye toward preventing possible US and allied intervention in a conflict with Taiwan.

"The pace and scope of China''s sustained military investments have allowed China to pursue capabilities that we believe are potentially destabilizing to regional military balances," Fox News quoted Michael Schiffer, the Deputy Assistant Secretary of defense for East Asia, as saying.

Schiffer added that the military development `increase the risk of misunderstanding and miscalculation and may contribute to regional tensions and anxieties.'

The report, titled `Military and Security Developments Involving the People''s Republic of China', said that China made `modest, but incremental, improvements in the transparency of its military,'

The report expressed `uncertainty about how China will use its growing capabilities.'

The report also noted China''s investment in modern military hardware and technology, including in its naval forces, as the country recently launched its sea trials on a refitted aircraft carrier.

According to Xinhua, the 94-page report said China is developing anti-ship missiles that could target aircraft carriers while expanding the naval fleet.

"Following this period of ambitious acquisition, the decade from 2011 through 2020 will prove critical to the PLA (People''s Liberation Army) as it attempts to integrated many new and complex platforms," the report said.

The Pentagon report has drawn protest from China over its `interfering nature, distortion of facts and baseless speculations'. (ANI)