"The Pentagon report exaggerates China's military strength and expenditure with ulterior motives," the Foreign Ministry said in a statement posted in its Web site (www.fmprc.gov.cn).

"It continues spreading the 'China threat' theory, seriously violates the norms of international relations and is a gross interference in China's internal affairs," it added. "The Chinese side expresses strong dissatisfaction and resolute opposition to this."

The U.S. Defense Department report released on Friday said that while Beijing remained focused on the Taiwan Strait as a potential flashpoint, it also appeared to be looking to project its growing military strength elsewhere.

Not so, China's foreign ministry said.

"China is a peace-loving country which sticks to a path of peaceful development and adopts a defensive national defense policy," it said. "The international community has a fair judgment that China is an important force in promoting peace in the Asia-Pacific and in the world."

Jiang Yu, spokeswoman of the Ministry of Foreign Affairs, speaks at a regular press conference in Beijing in this May 22, 2007 photo. [fmprc.gov.cn]

In March, China said it would boost defense spending by 17.8 percent to about $45 billion in 2007.

"It is the responsibility of any sovereign country to conduct necessary national defense build-up to safeguard national security and territorial integrity," the foreign ministry statement added.

"The report's whipping up the 'China threat' theory is completely wrong and will be in vain."

Taiwan is part of China, and China resolutely opposes to any country interfering in China's internal affairs, in any forms, Jiang said.

The Chinese government adheres to the principle of "peaceful reunification and one country two systems", but will never allow "Taiwan independence".

She urged the United States to stand by its promises, to stop selling weapons to Taiwan and not to send wrong signals to the "Taiwan independence forces."