This is the 2013 version of the annual report to the US Congress on Military and Security Developments involving the People's Republic of China. Section 1246, "Annual Report on Military and Security Developments Involving the People's Republic of China," of the National Defense Authorization Act for Fiscal Year 2010, Public Law 111-84, which amends the National Defense Authorization Act for Fiscal Year 2000, Section 1202, Public Law 106-65, provides that the Secretary of Defense shall submit a report "in both classified and unclassified form, on military and security developments involving the People's Republic of China. The report shall address the current and probable future course of military-technological development of the People's Liberation Army and the tenets and probable development of Chinese security strategy and military strategy, and of the military organizations and operational concepts supporting such development over the next 20 years. The report shall also address U.S.-China engagement and cooperation on security matters during the period covered by the report, including through U.S.-China military-to-military contacts, and the U.S. strategy for such engagement and cooperation in the future." THE PEOPLE'S REPUBLIC OF CHINA (PRC) continues to pursue a long-term, comprehensive military modernization program designed to improve the capacity of its armed forces to fight and win short- duration, high-intensity regional military conflict. Preparing for potential conflict in the Taiwan Strait appears to remain the principal focus and primary driver of China's military investment. However, as China's interests have grown and as it has gained greater influence in the international system, its military modernization has also become increasingly focused on investments in military capabilities to conduct a wider range of missions beyond its immediate territorial concerns, including counter-piracy, peacekeeping, humanitarian assistance/disaster relief, and regional military operations. Some of these missions and capabilities can address international security challenges, while others could serve more narrowly-defined PRC interests and objectives, including advancing territorial claims and building influence abroad. To support the Chinese People's Liberation Army's (PLA) expanding set of roles and missions, China's leaders in 2012 sustained investment in advanced short- and medium- range conventional ballistic missiles, land- attack and anti-ship cruise missiles, counter- space weapons, and military cyberspace capabilities that appear designed to enable anti- access/area-denial (A2/AD) missions (what PLA strategists refer to as "counter- intervention operations"). The PLA also continued to improve capabilities in nuclear deterrence and long-range conventional strike; advanced fighter aircraft; limited regional power projection, with the commissioning of China's first aircraft carrier, the Liaoning; integrated air defenses; undersea warfare; improved command and control; and more sophisticated training and exercises across China's air, naval, and land forces.