The Pentagon's just-released report to Congress on Chinese military power is alarming for two reasons: First, Beijing's military buildup continues; second, the modernization of our armed forces may come up short of what's needed to meet the China challenge.

While the outcome of these troubling trends can't be foretold, there are solid reasons for worry about America's power and position in the Pacific Ocean in the years to come.

The People's Liberation Army clearly is developing doctrines and deploying capabilities for throwing its weight around in the Pacific and beyond. The Pentagon paper talks of Chinese "power-projection," "anti-access" and "area-denial" strategies and forces, all aimed at keeping America at bay in Asia, should Beijing decide to do so.

The report notes, for instance: "China has the most active land-based ballistic- and cruise-missile program in the world" and is sending to sea cruise missiles on ships and intercontinental-range missiles aboard subs.

Of particular concern to our Navy is China's development of an anti-ship ballistic missile with a maneuverable warhead and range of more than 1,000 miles. This DF-21 variant is a "carrier-buster" and a threat our navy has never faced.

Beijing's robust building program has made it the largest naval force in Asia, outstripping the likes of Japan and South Korea, the region's other major military powers.

Now, the Defense Department tells us, China has an aircraft-carrier R&D program under way. Beijing could start building its own carrier by the end of 2010, capable of handling fixed-wing aircraft.

When that ship hits the water, we'll no longer be the only flattop navy in the "Pac."

On the aviation front, China is adding advanced aircraft to its inventory, allowing Beijing to create turbulence far from its air space. Notably, it's upgrading its bomber fleet, arming it with long-range cruise missiles.

All this muscling-up isn't likely to end soon. Beijing upped defense spending nearly 8 percent this year, after two decades of double-digit hikes. China's new position as the world's second-largest economy will help.

Unfortunately, these dizzying developments come as the US defense establishment debates the future. After nearly nine years of war, some expect demands for a "peace dividend" -- meaning cuts in the Pentagon budget even deeper than what are already in the pipeline. Others are pushing for maintaining a heavy emphasis on coun-

terterror/insurgency operations -- a focus that inevitably diverts money from the resources needed for conventional war-fighting.

While we can't ignore the wolf nearest the sled, we must also plan for other contingencies. Some increasingly worry about our ability to fight a big-power war. From the Pentagon report, it's clear we have competition.

For example, we have 11 aircraft carriers total. But due to at-sea rotations and maintenance only seven or eight of them are ready for duty at a time -- and getting that many to sea could take 90 days. In a theater like the Pacific -- known for its "tyranny of distance" -- 90,000 tons of floating US airfield is pretty darn important for looking after your interests. Worse, that 11 may shrink to 10 in the coming years. (We had 15 carriers during the Reagan years.)

We're also running low on the number of ships and subs the Navy needs to do the job. For our aviators, the planes are getting old. The newest fighter, the F-22, was deep-sixed after a limited production run; its follow-on, the F-35, won't be in service till 2014; and the Air Force's bomber fleet averages 32 years in age -- older than many of its pilots.

Overall, the US military has enormous capital-spending needs. Our strategic nuclear forces need modernization; more missile defense is critical, and some worry our defense-oriented tech edge is slipping, too. Plus, the Army and Marines have to replace vast numbers of fighting vehicles and other equipment being used up in Iraq and Afghanistan.

We need to win the fights we're in now, but we need to be ready for the possible fights to come. That means having a well-balanced force able to address the contingencies we'll face in the 21st century, whether that is terrorism, insurgency -- or the rise of another major power.

Peter Brookes is a Heritage Foundation senior fellow and a former deputy assistant secretary of defense.