Chinese leaders, the report asserted, view this as a time to “focus on internal development while avoiding direct confrontation,” although they expect tension, competition, and territorial flare-ups from time to time, and they do not expect the status quo, however satisfactory they find it, to last indefinitely.

The United States, decades ahead technologically, spends much more, and in pivoting its strategy toward Asia and the Pacific, “seeks to build a military-to-military relationship with China that is healthy, stable, reliable, and continuous,” the annual report said.

Two months ago, Beijing announced an 11.2 percent increase in its annual military budget to roughly $106 billion. While economic comparisons and analysis have always been difficult, there is no doubt that the past few decades have seen steady expansion in China’s military spending, and the Pentagon’s estimate is that China is investing more than it says, but still only about a fourth of what the United States spends each year on the military.

For its money, China is getting more weapons, and better ones.

Its air force is “transforming into a force capable of offshore offensive and defensive operations,” the report said, with prototypes of a stealth fighter seen starting last year. Other areas of investment include defenses against ballistic missiles, early warning and air-defense missiles, and their land and naval equivalents.

But the developments cited in the report unfold only over decades. For example, China’s first aircraft carrier, purchased from Ukraine in 1998, set out on its shakedown cruise last summer, but China still has no planes equipped to land on its deck, and its naval pilots are still training ashore. “We expect it’ll take several additional years for an air group to achieve a minimal operational capability aboard the aircraft carrier,” said David Helvey, a Pentagon official handling regional issues, at a briefing on the report.

In many ways, the modernization shows a Chinese military that has watched what the United States has done in the past generation or two, and is exploring the same avenues of growth. From the restructuring of its army to the new ascendancy of information technologies in warfare, there are parallels.

To be sure, there are profound differences, as the People’s Liberation Army, or P.L.A., plays a distinct role in Chinese society, government, and economic affairs.

The two militaries are already operating more frequently in overlapping territories, and the 2012 report traced the same themes as last year’s, but a bit more succinctly.

In the past year, it noted, the P.L.A. “deployed assets to support noncombatant evacuation operations from Libya, extended its presence in the Gulf of Aden for a third year of counterpiracy operations, took on leadership roles in United Nations peace operations, and conducted medical exchanges and a service mission to Latin America and the Caribbean using the P.L.A. Navy’s hospital ship.”

These are examples of what the Chinese call “new historic missions” for the P.L.A., and while they are generally not threatening to other nations, they demonstrate a new assertiveness that the Pentagon, and some allies of the United States, look upon warily.

“China’s actions in 2011 with respect to ongoing land and maritime territorial disputes with neighbors,” the report said, “reflected a mix of contentment with the status quo, renewed efforts to reassure wary neighbors, and continued willingness (particularly through the use of paramilitary maritime law enforcement assets) to assert Chinese claims.” This has been especially notable in the South China Sea, where tensions with the Philippines continue.

However, “China notably took steps to ease relations with Japan and dampen suspicion among rival South China Sea claimants after China’s assertive posture in 2010 increased regional tensions. These steps included high-level engagement with Tokyo and confidence-building measures with the Association of Southeast Asian Nations (ASEAN), even as Chinese maritime law enforcement assets continued to defend Chinese claims in disputed areas,” the report said.