China on Friday dismissed a US report on its military expansion as "completely groundless" and said it had exaggerated the threat to Taiwan, the self-ruled island Beijing calls a breakaway province. The US defense department said in its annual report to Congress that China was increasingly focused on naval power and had invested in hi-tech weaponry that would extend its reach in the Pacific and beyond. The report, released on Wednesday, also renewed US warnings that China was extending its military edge over Taiwan, citing better artillery that could strike targets within or even across the Taiwan Strait. "The US report is totally and completely groundless," China's defence ministry said in a statement faxed to AFP, adding that it had "exaggerated the so-called mainland military threat to Taiwan". "It's normal for China to develop its army and update its weaponry, a common practice among other countries around the world," ministry spokesman Yang Yujun added. China considers Taiwan, where the mainland's defeated nationalists fled in 1949, to be a province awaiting reunification, by force if necessary. The defence ministry's comments came a day after China's state news agency Xinhua said the Pentagon report amounted to US "interference" in its affairs. "The 94-page report, as usual, interferes with the internal issue of China by making wilful comments on the situation across the Taiwan Strait," said Xinhua. "The Pentagon report, submitted to the Congress by the Pentagon annually pursuant to a US law since 2000, has drawn protest from China over its interfering nature, distortion of facts and baseless speculations." The dispute over Taiwan, including US arms sales to Taipei, has remained a stumbling block to Washington's attempts at promoting a security dialogue with the Chinese military. However Xinhua said relations between the US and Chinese militaries had improved over the past year. It cited a visit to China last month by US Joint Chiefs of Staff Chairman Mike Mullen, America's top military officer. Mullen's Chinese counterpart Chen Bingde visited the United States in May. Yang said the US report "doesn't meet... with the current trend of a positive development of military relations between the two countries, nor with the good momentum of the peaceful development of cross-Strait relations". China's People's Liberation Army -- the largest active duty military in the world -- is extremely secretive about its defence programmes, which benefit from a huge and expanding budget boosted by the nation's rapid economic growth. Beijing announced earlier this year that military spending would rise to 601.1 billion yuan ($91.7 billion) in 2011 and also said it was developing its first stealth fighter jet. Chinese military spending, however, is still far below the US defence budget, the world's largest, which was nearly $700 billion in 2010. China's weapons buildup comes as it places a growing emphasis on securing strategic shipping lanes and mineral-rich areas in the South China Sea. Beijing claims sovereign rights to almost all of the South China Sea, although several Southeast Asian countries have competing claims. The criticism by China's state-run media continued on Friday, with an editorial in the English-language edition of the Global Times daily calling the Pentagon a "bastion of mistrust of China". The Pentagon's annual report on China's military "is increasingly perceived as pathetic by Chinese people", it said. "The Pentagon actually needs to answer why US arms sales to Taiwan continue and remain the biggest factor of uncertainty stopping mainland-Taiwan relationship from advancing without a hitch."