China's official defense budget in 2004 is more than 25 billion dollars.
But when off-budget funding for foreign weapons system imports is included, total defense-related expenditures this year should soar to between 50 and 70 billion dollars, said Richard Lawless, the deputy undersecretary of defence.
This would rank China third in defense spending after the United States and Russia, he told a Senate hearing where China's military reforms were discussed Thursday.
Lawless, who handles security affairs in the Asia-Pacific, said that China's People's Liberation Army (PLA) had stepped up its modernization plan in recent years to prepare against any separation moves by Taiwan.
"In recent years, the PLA accelerated reform and modernization so as to have a variety of credible military options to deter moves by Taiwan toward permanent separation or, if required, to compel by force the integration of Taiwan under mainland authority," he said.
It also wanted capability to "deter, delay or disrupt third-party intervention in a cross-Strait military crisis," Lawless said.
China claims Taiwan as part of its territory despite a split 55 years ago at the end of a civil war, and has said it would invade if the island declared independence or descended into chaos.
The United States is Taiwan's biggest ally and arms supplier and is bound by law to provide weapons to help Taiwan defend itself if the island's security is threatened.
But Washington also acknowledges Beijing's position that Taiwan is part of China.
Lawless said PLA's determined focus on preparing for conflict in the Taiwan Strait "raises serious doubts over Beijing's declared policy of seeking 'peaceful reunification' under the 'one country, two systems' model."
He said conventional missile operations was among key areas of reform of the Chinese military.
Beijing's growing conventional missile force provides a strategic capability "without the political and practical constraints associated with nuclear-armed missiles."
"The PLA's short-range ballistic missiles (SRBMs) provide a survivable and effective conventional strike force and represent a real-time coercive option," he said.
China continues to improve the capabilities of its conventionally-armed SRBM force.
Some 500 to 550 SRBMs are deployed opposite Taiwan, increasing at a rate of 75 a year, Lawless said, adding that the "accuracy and lethality" of this force also were expected to increase through use of satellite-aided guidance systems.
He said China wanted to develop capabilities "to fight and win short duration, high intensity conflicts along its periphery."