The Pentagon on Thursday released an annual report on the Chinese military with the usual narrative that mainly focuses on China's defense spending increase while overlooking its peaceful defense policy.

The report says China continued more than two decades of sustained annual defense spending increases with aims to improve China's capabilities such as advanced intermediate- and medium-range conventional ballistic missiles, anti-ship cruise missiles, counter-space weapons and offensive cyber capabilities.

"China's military investments provide it with a growing ability to project power at increasingly longer ranges," the report says. "In 2013, this included at-sea testing of China's first aircraft carrier and continued development of fifth-generation fighter aircraft."

In March, China announced that its military expenditure will grow by 12.2 percent to 808.2 billion yuan (about 132 billion U.S. dollars) in 2014, the fastest yearly growth in the country's defense budget in three years.

The 96-page Pentagon report attributes the defense budget increase partly to the increasing international responsibilities China is facing.

As China's interests, capabilities and international influence have grown, its military modernization program has also become increasingly focused on military investments for a range of missions beyond the country's coast, including sea lane security, counter-piracy, peace-keeping, humanitarian assistance and disaster relief, the report says.

In addition, the report makes willful comments on the situation across the Taiwan Strait, devoting an entire chapter on "force modernization for a Taiwan contingency."

It says China is preparing for potential conflict in the Taiwan Strait, including deterring or defeating third-party intervention, which remains the focus and primary driving force behind China's military investment.

"The People's Liberation Army of China also is placing emphasis on preparing for contingencies other than Taiwan, including potential contingencies in the South and East China Seas," the report claims.

The Pentagon report, submitted to the U.S. Congress annually since 2000, has drawn protest from China over its interfering nature, distortion of facts and baseless speculation.

China has repeatedly stated the defensive nature of its national defense policy and has issued white papers on national defense since 1998 to enhance transparency and boost trust in its commitment to peaceful development. China has made it clear that its armed forces have always been a staunch force of upholding world peace and regional stability.

A report released by the London-based International Institute for Strategic Studies shows the United States, with a budget of more than 600 billion U.S. dollars, remained the world's biggest defense spender in 2013. Endi