No document reflects the conflicting strategic position of a declining superpower and that of a rising one more aptly than the Department of Defense's congressionally-mandated annual reports on China's military modernization.

The Pentagon issued the latest version of that report entitled, "Military Security and Development Involving the People's Republic of China" (aka China's military rise) on August 20. That report was issued almost simultaneously with the global splash of a headline that the PRC had surpassed Japan as the number two economy.

Considering the fact that China's economy has been experiencing average annual gross domestic product growth of 9 percent for the past six years or so, it can be expected continue to channel a portion of that wealth into financing military modernization. This is evidenced by China's resolve to build aircraft carriers, which it considers the ultimate symbol of the military capability of a potential superpower.

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As much as China remains a rising economic power, its military power is not likely to be a match for America's military prowess and capabilities. China knows that. That is why it is spending a lot of its resources developing "anti-access/area denial" technologies and capabilities, especially involving Taiwan. The Chinese thinking seems to be that, in case of a military conflict involving Taiwan, the PRC would improve its chances of victory if it can succeed in holding off US military intervention through the use of such technologies.

Beijing is also spending a lot of its resources on developing "countermeasures" to nullify America's ever-escalating capabilities to project power in far off lands. The 2010 DoD report takes a detailed look at those capabilities.

Starting from the awe-inspiring performance of America's military in Operation Desert Storm in 1991, the PLA's top brass, as well as defense-related scientists, have been spending many of their resources studying the specifics of America's space dominance, as much as those details are available in open sources. In addition, the espionage wing of the PLA and other civilian agencies are also busy collecting data in the field on the use of space by the American military. China knows how integral a role America's mastery of space has played in that country's military capabilities to maintain full-spectrum dominance in warfare.

Second, no military belonging to any country has been more absorbed in implementing the "revolution in military affairs" and digitization of warfare in its combat capabilities. In fact, China has gone way beyond the use of information warfare in the field of defense. It has also mastered "malware" (or malicious software) espionage, which it has used to spy on Tibetan dissidents. Malware is used for espionage in defense as well as in the military and intelligence fields.

Its purpose is to collect data as well as to corrupt targeted computer systems. According to one study on the subject, "Few organizations outside the defense and intelligence sector could withstand such an attack, Given the high interest of the PRC in this field, and given that it is a closed system, its competitors (especially US government agencies) not only have to constantly remain on guard in developing electronic countermeasures, but find themselves in the dark about the latest capabilities of IT specialists on the Chinese side who are in charge of running that country's "black programs."

Third, the PRC is also using its defense experts to study all the military exercises in China's neighborhood involving the American military – Japan, South Korea, Australia and India. Electronic eavesdropping also works well for China in studying American maneuvers. In that regard, China's "String of Pearls" strategy, an attempt to build client-state relationships to surround India, has not even begun to bear fruit, in terms of providing a treasure trove of intelligence on the activities of the navies of the aforementioned countries.

Fourth, the most impressive aspect of the US military's war-fighting capability for the PLA is the ostensible ease with which it develops sui generis operations for each campaign conducted since the Operation Desert Storm, which is regarded as the "first information-based war." The strategy used in the Kosovo war, Operation Allied Force, was a reminder of the one used during the American war in Vietnam. That strategy focused on gradual escalation of air strikes without the threat of ground forces. In the invasion of Afghanistan, Operation Enduring Freedom, it was the exotic use of spotters from the Special Forces that directed air attacks on the Taliban from the ground, while also directing the offensive power of the ground forces of the Northern Alliance. For invading Iraq, Operation Iraqi Freedom, the Centcom initiated the conventional approach of relying on ground troops for the brunt of its operations.

What was different about that operation was that the chief focus of the "Powell doctrine" – the use of overwhelming force – was shelved in favor of a minimalist approach regarding the size of force. Former Secretary of Defense Donald Rumsfeld and former Centcom Commander General Tommy Franks thought that they were making a unique contribution to combat by creating "shock and awe" with a minimal number of ground troops. That was more a "transformational agenda" of Rumsfeld, who was "appalled to discover how much the forces were still fixated on preparing for big wars and purchasing high-profile weapons platforms rather than developing smaller, nimbler forces geared to the actual contingencies he thought they were likely to face." In their attempt to correct that perceived archaic approach, Rumsfeld and Franks might have gone too far in reducing the force size. General Anthony, who preceded Franks as Commander of Centcom, immediately went on record in pointing out that "his own war plan for invading Iraq had a couple of additional divisions – not for the war fighting, but for what they call the consolidation and exploitation phase at the end of the war."

However, even if the Iraqi quagmire that followed the collapse of the government of Saddam Hussein has not reestablished the significance of Powell's insistence on the use of "overwhelming force," it has certainly discarded Rumsfeld's transformational agenda related to size of the force. One of the major lessons that the US military learned was that it must get ready for "post-conflict" contingencies before invading a country.

The top brass of the PLA watched these developments with much interest and drew their own lessons for future combat that their armed forces might face. The most significant lesson that the PLA drew from the U.S. military is to never stop studying the latter's unique contribution to the prosecution of war. Since the United States has been involved in too many major combats since the Gulf War of 1991, no military can claim that it has more combat experience than America's. And any military that wishes to remain at the cutting edge of its profession without paying the cost of actual prosecution of war would serve itself well to become an ardent student of America's campaigns.

Every time the Pentagon's report on China's military is issued, one can expect a repeat of the following: (1) When the document is released, it contains the standard statement that China is still following the late Deng Xiaoping advice: "observe calmly; secure our position; cope with affairs calmly; hide our capabilities and bide our time; be good at maintaining a low profile; and never claim leadership;" (2) It highlights the developments of China's military modernization, which remains one of its best contributions to the subject anywhere in the world; (3) It accentuates the types of strides being made in China's space capabilities to take countermeasures against a potential enemy, the PRC's advances in information and electronic war, and especially in the realm of access denial.

The U.S. military has rightly concluded that China can inflict great damage to its space assets during a military conflict, and that damage is likely to come during the very early stage of the outbreak of hostilities; and (4) It criticizes China for not being truthful about the size of its military spending and not being transparent about the real purpose of its military modernization. On this last point, the United States' criticism is quite effective, because it is closely being read by all countries of East Asia, and by China's major rival, India.

The PRC's standard response regarding America's perspectives on its military modernization is the accusation that the lone superpower is attempting to contain it. In response to the latest issuance of this document, one Chinese colonel of the PLAF, Dai Xu, accused the US in an OpEd piece of "strangulating China softly."

The timing of the 2010 version of the Pentagon's report on China's military was not particularly good because US-China ties are undergoing an icy phase emanating from President Obama's meeting with the Dalai Lama and the US decision to sell US$6 billion worth of armament to Taiwan. China responded by suspending the contacts between militaries of the two nations. The Obama administration characterized China's response as an "overreaction" to those events.

The United States is having difficulty realizing that China's perceptions of itself and of the lone superpower are undergoing a palpable transformation. Since the PRC envisages the lone superpower as a declining hegemon, and since its self-perception is that of a rising power (and even of a future a superpower), the current leaders in Beijing believe the former must accord the latter more deferential treatment. When China does the US a favor in global economic matters, the latter must reciprocate on other heady issues like not selling arms to Taiwan or not making a point of receiving the Dalai Lama.

The notion of reciprocity (shu) is a quintessential aspect of Chinese culture. The Sage Confucius reported to have instructed one of his disciples that his doctrine of shu "has only one simple thread running through it" – "Loyalty and reciprocity, and that's all."

One has to add to that the major Confucian principle of the doctrine of hexinliyi ("core interests"). In the context of Western thinking, hexinliyi is equivalent to vital interests on which no country would compromise.

For China, these include, first and foremost, the survival of its political system. The second is inviolability of its sovereignty and territorial integrity, two principles that are also inextricably linked with that country's bitter memories of what it frequently refers to as "the century of humiliation." The third core interest of China is steady societal and economic development.

What is interesting to note is that, as China continues its awesome economic rise, it seems to have initiated the process of expanding the list of its core interests. In the past, only Taiwan and Tibet were included in that list. Lately, however, it has also added the South China Sea as a core issue. Considering the fact that the PRC has shown no inclination to negotiate on the "old" core issues, it is expected to do the same regarding the South China Sea. There is a major difference between its old and its new core issues.

On its old core interests (Taiwan and Tibet) no other country is claiming sovereignty over them (even though one can argue that Taiwan claims to be a sovereign nation and its sovereignty is recognized by numerous countries, but their numbers are steadily dwindling). However, in the case of the South China Sea, the interests of other states of East Asia come into conflict with that of China.

For a country that has been so vociferous about America's hubris related to its unilateralism and "hegemonism," China's decision to elevate the significance of the South China Sea as a core issue is nothing short of its own manifestation of arrogance. One can objectively state that China's behavior might merely be a demonstration of how a rising or "wannabe" superpower behaves.

However, that type of hubris will only escalate the suspicion of its East Asian neighbors regarding the real purpose of China's rise and especially of its military modernization.

America's hardline China-watchers, who felt content with the Bush administration's proclivities for unilateralism, do not like the Pentagon's 2010 report on China's military preparedness. The United States' attitude toward China went through a noticeable transformation in Bush's second term, however, when he direly needed that country's cooperation on the Six-Party Talks and especially during the global economic meltdown of 2008-2009.

Still, even when there is a recurring softening of American official attitude toward China, the notion of competition remains uppermost amidst almost all the China-watchers of America and among America-watchers inside China.

Unlike the superpower competition of the Cold War years, the current competition between Beijing and Washington is not predominantly ideological (even though one has to remain conscious of the fact that the United States is a liberal democracy while the PRC is an illiberal system with predominant features of a capitalistic economy). But the Sino-US competition is for primacy in the world between the lone superpower, which is determined not to lose its top position in the hierarchy of nations, and a rising power, which is equally resolute to become number one.

Two important questions for the second decade of the 21st Century are whether China can be satisfied even by becoming a coequal of the United States; and whether the latter would be amenable to accepting China as its coequal? A very important, but a tacit, aspect related to the latter question is that the United States should also be ready for the scenario of China becoming number one among the hierarchy of nations within a decade or so.

Those are hard questions to answer because the United States never had a coequal during the heyday of the Cold War. The former Soviet Union was arguably America's coequal in the ownership of nuclear arsenals. In the realm of economics, however, the USSR was very much a Third World country. China, on the contrary, has turned the Soviet template on its head by becoming an economic power first, then using its economic wealth to become a military superpower.

That may be why the United States remains so concerned about China's rise. As long as China's economy remains as vibrant as it has been for a decade or so, its rise as a superpower appears inexorable.

Despite the rising spirals of competition between them, neither the US nor China appears disposed to seek confrontation that has a high potential of rapidly escalating. Both – especially the latter – have a lot to lose if a war breaks out between the two. China has accomplished much in the past three decades. It is the "world's largest trading nation."

In the words of Zheng Bijian of the China Reform Forum, "The most significant strategic choice the Chinese have made was to embrace economic globalization rather than detach themselves from it." And it has not shown any intention of risking such magnificent gains. In view of their clashing aspirations, their mutual ties "will never be warm. But they could well be 'workmanlike."

The best hope for the world is that the U.S.-China's Janus-faced cooperative and competitive strategic ties always remain manageable and open for frequently recurring rapprochements.

Ehsan Ahrari, Ph.D. is a specialist in great power relations and transnational security. His latest book on great power relations is entitled, The Great Powers and the Hegemon: Strategic Maneuvers. He can be reached at ahrarie@gmail.com