The US-China Economic and Security Review Commission said China's military modernization is altering the balance of power in the Asia-Pacific, challenging decades of US pre-eminence.
The commission, which released its wide-ranging annual report today, advises Congress on the national security implications of the relationship between the two world powers.
It also examines cyber intrusions from China, the trade and economic relationship with the US and China's relations with the wider world.
That's a key priority of the Obama administration's diplomatic and military rebalance to Asia, after a decade of war in Afghanistan and Iraq.
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The commission said it welcomes the policy, but added: "There is growing concern among US allies and partners that the Department of Defense will be unable to follow through on its commitment to the rebalance due to declining defense budget and continuing security challenges elsewhere."
Last year, the Chinese Foreign Ministry accused the commission of "indulging in cold war mentality." Beijing says it has no offensive intent, and accuses Washington of trying to contain it.
The US still far outstrips China in military spending, but in Asia faces a greater burden in fielding forces far from its own shores.