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Hu Changming, spokesman of China's Defense Ministry, said the report severely distorted facts, censured China's legitimate and normal national defence development, and disseminated the mainland's "so-called military threat" to Taiwan.
"China is strongly dissatisfied with it and resolutely opposes it," said Hu. "China unswervingly sticks to a path of peaceful development and pursues a national defense policy which is purely defensive in nature."
Hu noted that China is not in an arms race of any form and constitutes no threat to other countries.
Hu said the report, which continued the dissemination of the "Chinese military threat" theory and severely distorted facts, was absolutely groundless.
Hu said Sino-U.S. military ties have not yet completely moved out the difficult period as many obstructions still await to be got over.
"The report, issued under such circumstance, could only bring negative influence to the resumption and development of bilateral military ties."
"We urge the United States to stop issuing such a report on China's military strength and immediately take effective measures to dispel the baneful influence caused by the report so that bilateral military ties will incur no further damages," Hu added.
The Pentagon on Wednesday released its annual report about the Chinese military repeating its complaint about "limited transparency." It questioned the "purposes and objectives" of the People's Liberation Army (PLA).