Updated

WASHINGTON—The Pentagon voiced alarm over China's military buildup, saying it was expanding its advantage over Taiwan and investing heavily in ballistic and cruise missile capabilities that could one day pose a challenge to U.S. dominance in the western Pacific.

In its annual report to Congress on Chinese military capabilities, the Pentagon also cited China's advances in electronic warfare. The U.S. government has been the target of cyber intrusions the report says appear to have originated in China and aimed to steal military secrets. "These intrusions focused on exfiltrating information, some of which could be of strategic or military utility," the report said.

Though their two countries are increasingly interlinked economically, ties between the U.S. military and the People's Liberation Army of China have deteriorated since January, when the Obama administration notified Congress of a plan to sell Taiwan up to $6.4 billion in arms.

Defense Secretary Robert Gates has appealed to the Chinese to re-engage to reduce the risk of any military miscommunications. But U.S. officials say they have seen few signs of a thaw.

Washington has long voiced alarm over China's military buildup opposite Taiwan. In this year's report, which was delivered months behind schedule, the Pentagon said China's military edge over Taiwan was continuing to "shift in the mainland's favor," the main argument used by the Obama administration in approving the arms deal.

A particular concern for the U.S. is China's development of an antiship ballistic missile with a projected range of nearly 1,000 miles. The missile is meant to give the PLA the capability of attacking ships, including aircraft carriers, in the western Pacific, the report said.

Click here for more on this story from the Wall Street Journal.