A Pentagon report released on Tuesday singled out Pakistan as a possible location for a future Chinese military base, as it forecast that Beijing would likely build more bases overseas after establishing a facility in the African nation of Djibouti.

The prediction came in a 97-page annual report to Congress that saw advances throughout the Chinese military in 2016, funded by robust defence spending that the Pentagon estimated exceeded $180 billion. That is higher than China's official defence budget figure of $140.4 billion.

Chinese leaders, the US report said, appeared committed to defence spending hikes for the “foreseeable future,” even as economic growth slows.

The report repeatedly cited China's construction of its first overseas naval base in Djibouti, which is already home to a key US military base and is strategically located at the southern entrance to the Red Sea on the route to the Suez Canal.

“China most likely will seek to establish additional military bases in countries with which it has a longstanding friendly relationship and similar strategic interests, such as Pakistan,” the report said.

Djibouti's position on the northwestern edge of the Indian Ocean has fuelled worries in India that it would become another of China's 'string of pearls' of military alliances and assets ringing India, including Bangladesh, Myanmar and Sri Lanka.

The report did not address India's potential reaction to a Chinese base in Pakistan. But Pakistan, the US report noted, was already the primary market in the Asian-Pacific region for Chinese arms exports. That region accounted for $9bn of the more than $20bn in Chinese arms exports from 2011 to 2015.

Last year, China signed an agreement with Pakistan for the sale of eight submarines.

Quantum satellite, cyber hacks

The Pentagon report flagged Chinese military advances, including in space and at sea. It cited China's 2016 launch of the first experimental quantum communications satellite, acknowledging that it represented a “notable advance in cryptography research.”

As in past years, the Pentagon renewed its concerns about cyber spying, saying US government-owned computers were again targeted by China-based intrusions through 2016.

“These and past intrusions focused on accessing networks and extracting information,” the report said.

“China uses its cyber capabilities to support intelligence collection against US diplomatic, economic, and defence industrial base sectors.”

In a section discussing Chinese Navy, the report predicted that China's first domestically designed and produced aircraft carrier would likely reach initial operating capability in 2020.

Beijing 'opposes' Pentagon report

Beijing, however, “firmly opposed” the Pentagon report, saying that Chinese government was a force for safeguarding peace and stability in the Asia-Pacific region and the world.

Chinese Foreign Ministry Spokeswoman Hua Chunying declined to comment on possible overseas bases but said that China and Pakistan were close friends that conduct "mutually beneficial cooperation" in a variety of fields.

While talking about the country's operating overseas defence projects, Hua said the bases were there to improve navigation safety and assistance for fishermen as well as "to safeguard China's independent sovereignty and territorial integrity. It is a legitimate right of a sovereign state.”

“We hope the US side will put aside the Cold War mentality, view China's military development in an objective and rational manner, and take concrete actions to maintain steady growth of the military relationship between the two countries,” Hua said.

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