A U.S. Defense Department report alleges that China is spending massive amounts of money – much of which is hidden or undeclared – in an effort to transform its military and alter the balance of power in a potential conflict with the United States over Taiwan. China considers Taiwan a breakaway province that must be reintegrated, by force if necessary. “The People’s Liberation Army (PLA) is pursuing comprehensive transformation from a mass army designed for protracted wars of attrition on its territory to one capable of fighting and winning short-duration, high-intensity conflicts along its periphery against high-tech adversaries,” the report to Congress says. “In the near-term, China’s armed forces are rapidly developing coercive capabilities for the purpose of deterring Taiwan’s pursuit of de jure independence. These same capabilities could in the future be used to pressure Taiwan toward a settlement of the cross-Strait dispute on Beijing’s terms while simultaneously attempting to deter, delay, or deny any possible U.S. support for the island in case of conflict.” China has reacted with fury, calling the report “a gross distortion of the facts” and interference in China’s affairs.