The report released Friday said China has more than 300 short range ballistic missiles that can strike Taiwan.

"This number will grow substantially over the next few years. Taiwan's ability to defend against ballistic missiles is negligible," it said.

At sea, the report said Taiwan's navy had the advantage over China.

It said the Taiwanese navy is well run and well equipped, but China has a much larger number of submarines that could pose a considerable torpedo and mine threat.

China also could use commercial merchant and fishing vessels to mine Taiwanese ports, and use anti-ship missiles on patrol boats and larger warships to strike Taiwanese vessels, the report said.

Taiwan, which has dominated the air over the Taiwan Strait for many years, today has four times as many advanced fighter aircraft as China, the report said.

"The PLAAF (People's Liberation Army Air Force) does not appear to be putting large numbers of aircraft in the air simultaneously, controlling large numbers of engagements, or sustaining high sortie rates for extended periods of operation," it said.

"Pilot proficiency is improving but China's best pilots lag behind their Taiwan counterparts in terms of capabilities," the report said.

"However, China's force modernization, weaponry, pilot training, tactics and command and control are beginning to erode Taiwan's qualitative edge," it said.

China is expected to acquire more advanced fighters and could use short range ballistic missiles to target Taiwan's air defenses and air bases.

"Over the next several years, given current trends, China likely will be able to cause significant damage to all of Taiwan's airfields and quickly degrade Taiwan's ground based air defenses and associated command and control through a combination of short range ballistic missiles, land attack cruise missiles, special operations forces and other assets."

China's only ground forces advantage is its overwhelming size -- provided they can be delivered to the battlefield, the report said.

Taiwan's ground forces will maintain an edge for ground combat on the main island unless China expands significantly its amphibious fleet.

"There is little discussion in the available Chinese literature of any need to develop such capabilities," the report said.

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