Beijing is focusing on developing long-range missiles "to strike at American bases and battle carrier groups stationed in the Asia-Pacific... so as to block the United States from coming to the rescue of Taiwan should war break out in the Taiwan Strait," the ministry said in a report released Monday.

"Although the Chinese communists have claimed they would like to solve the Taiwan issues in a peaceful manner, they have asked their forces to step up preparation for military struggles against Taiwan," the report said.

China believes that "if it employs military actions against Taiwan, foreign intervention would be its greatest concern, with the United States being the most significant foreign power," it added.

Taiwan and the mainland have been governed separately since 1949, but Beijing sees the island as part of its territory awaiting reunification, by force if necessary.

China has repeatedly pledged to invade Taiwan should the island declare formal independence.

The People's Liberation Army's budget increased 17.8 percent to 44.94 billion US dollars in 2007, official figures show, making China the third largest military spender in the world after the United States and Russia.

But Taiwan's report said the true figure was two or three times that, and warned that China's rapid military expansion had tipped the military balance in the Strait.

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