The U.S.-China Economic and Security Review Commission has undertaken a comprehensive assessment of Chinese military capabilities, economic developments, and political and foreign policy objectives. Their annual report is a superb resource for Congress and the public. In the report, the Commission has assessed the key military and foreign policy developments made by China in the past year and the implications for our own policies and posture in the region. While we continue to warn about our military's readiness and the dangerous effects of budget cuts and sequestration, China's military spending continues to rise and its new leadership seeks to increase combat readiness. Its current pace of military modernization shows that Beijing is developing the ability to project power and influence further abroad. China can play a constructive role in the region and the world, but recent trends in their anti-access and area denial capabilities and cyber espionage campaigns in particular give us cause for concern.