Released in early June, the US Defence Department report is part of an annual synopsis of China's military strength. It said the most striking aspect of last year's war for People's Liberation Army (PLA) strategists was the speed with which Baghdad was taken using a combination of air and ground forces.
The recent photos concerning the hidden working of Abu Ghraib prison may have revealed the full nature of what the US military really meant by shock and awe tactics.
But when it comes to learning from and emulating military strategy, it seems the US army is still considered the benchmark to go by.
''The speed of the coalition ground force and the role of special forces ... have caused PLA theorists to rethink their assumptions about the value of long-range precision strikes, independent of ground forces,'' the report says.
Apparently, the PLA is now focusing its attention on greater cross-force coordination as a result of witnessing allied ground and air troops working effectively together in Iraq.
Currently the world's largest armed force with some 2.5 million personnel, the PLA has been struggling to reform itself since 1979 when a series of inconclusive border clashes with Vietnam exposed the weaknesses of relying upon superior numbers alone.
This year, according to Chinese government figures, Beijing is planning an 11.6% increase in defence spending, a hike that will bring the total defence figure to $25 billion. (By contrast, the Bush administration has requested a 2005 defence budget of $401.7 billion, although some experts have said the real figure may be double that.)
The point of this new spending increase, said Luo Yuan, a senior strategist at the Academy of Military Sciences, is to help China close the technological gap between foreign and domestic military organisations.
China's plans have fuelled talk of
an arms race in the Asia-Pacific
By learning in part from the US, China is planning a force reduction of some 200,000 troops coupled with a heavy investment in advanced technology, including space-based weaponry and an improved communication system.
The Pentagon estimates China's actual defence budget at between $50 and $70 billion (a figure that would make China the third largest defence spender in the world), and describes China, after a decade of strong economic growth and enhanced international stature, as being focused on achieving "great power status".
"It is no secret that China aspires to have developed military capabilities," Robert Karnoil, Asia-Pacific editor of Jane's Defense Weekly, a specialist publication on military affairs, told Aljazeera.net.
"They have themselves announced that in the short term (the next 50 years), their aims are to be the overwhelming power of influence in the region, while in the long term (next 100 years) they want to be compatible with the US."
Such ambitions have already had some talking about the prospect of a second cold war and arms race taking place in the Asia-Pacific region.
According to Randall Forsberg of the Institute of Defence and Disarmament Studies, an independent thinktank on global military affairs, the steady decline of US influence in the area could result in a competitive arms race between regional powers, most notably Russia and China.
"China's military strategy reflects the ambiguity with which
its leaders seek to
cloak military and security affairs"
"Until September 11, the prospect of an East Asian arms race was a key part of US administration thinking in Asia, and I expect that as the Iraqi situation cools, attention will be turned back to East Asia," Forsberg said.
The Chinese Government has responded coldly to the Pentagon report, which talks about Beijing's ultimate motives for increasing arms spending - in particular a questioning of what exactly China's defence policy means.
"China's military strategy, Active Defence, reflects the ambiguity with which its leaders seek to cloak military and security affairs," says the Pentagon report.
It declares a defensive approach and asserts China does not initiate wars or fight wars of aggression, but engages in war only to defend national sovereignty and territorial integrity and 'attacks only after being attacked'.
However, Beijing's definition of an attack on national territory or sovereignty, or what constitutes an initial attack, remains vague."
Speaking at a Foreign Ministry press conference, spokesman Liu Jianchao was quoted by the Xinhua media group as saying that the report was full of "Cold War mentality and the hackneyed theme of a China threat".
Denying what he called "ulterior motives" in releasing the report, Liu Jianchao went on to declare: "China has a right to build up national defence in safeguarding national security and territorial integrity."
Although a yearly fixture, the report has helped draw further attention to the region and the biggest single potential flashpoint, Taiwan.
With an estimated total of 500 short-range missiles pointed at the island, Taiwan is seen as an integral part of China and a renegade province by Beijing. However, the island continues to enjoy a degree of US protection and arms support.
Now the growth of Taiwanese nationalism under President Chen Shui-bian is proving irksome to Beijing. Prior to his recent re-election, Chen made preparations to hold a referendum asking the Taiwanese public whether or not they wanted the missiles to remain pointed at them.
In the end, the referendum failed to attract enough votes to be deemed official but in the mainland's eyes any referendum on an issue concerning a "region" of China should include the entire Chinese population, not just the inhabitants of its "rogue province".
China has long stated that any declaration of independence will result in a military response from the mainland.
Taiwan President Chen's brand of
nationalism worries China
"America may see a further increase in coastal missiles as being provocative but among the Chinese public and intellectuals China does need to strengthen its military," said professor Mei Renyi of the American Studies Centre in Beijing's Foreign Studies University.
"No Chinese leader could countenance not being able to respond were Taiwan to declare independence - it would be too big a blow to the Chinese authorities."
According to the Pentagon report, China is already putting the lessons learnt from Iraq into effect with increased investment and training for military units stationed closest to Taiwan.
Moving away from the notion that airpower alone can force a capitulation (a notion that became popular after the 1999 Kosovo conflict), China is apparently upgrading equipment among amphibious assault units and training special forces for tactical-strike operations.
In addition, China is focusing on building up a more advanced submarine fleet with quieter vessels and harder-to-detect torpedoes, a key component in holding back any US naval task force were the US to intervene in a cross-straits war.
As impressive as China's plans may be, the PLA is still a fighting force of dubious utility and it remains questionable as to whether it can upgrade its equipment in line with projections.
"The PLA is not an efficient fighting force for any major conflict as the modernisation of the army is just too large scale and too expensive," said Karnoil of Jane's Defense Weekly. "They have not seen conflict for 35 years."
Symbolic of this was the PLA's recent purchase of 24 Su-30 aircraft from Russia. According to Forsberg, the quality of these planes is not in line with the latest technology, and the fact that China is importing planes perhaps suggests that its own designs have failed to meet expectations.
"This is still a backward and impoverished country and this is
where China's leaders concerns now lie"
professor, Foreign Studies University, Beijing
China does not yet have the economic infrastructure and scientific know how in place to generate advanced technological weapons," said Forsberg.
In addition, although the Pentagon suggests that China's real military budget for 2004 is $50 to $70 billion, others believe this is unrealistically high.
"People are exaggerating the threat posed by China by overstating the country's economic growth and the emphasis China's leaders place on military build-up," said Mei.
"China learnt from the USSR-US arms race and how that hastened the collapse of the Soviet Union's economy.
"This is still a backward and impoverished country and this is where China's leaders' concerns now lie," said professor Mei.