Although the dialogue between the United States and China is improving, outstanding questions remain about the rate of growth in China's military expenditures due to the lack of transparency regarding China's intentions. In 2013, China announced a 5.7 percent increase in its annual military budget to $119.5 billion, continuing more than two decades of sustained annual defense spending increases. China sustained its investments in strategic forces modernization, as well as key anti-access/area-denial (A2/AD) capabilities such as advanced intermediate- and medium-range conventional ballistic missiles, long-range land-attack and anti-ship cruise missiles, counter-space weapons, and offensive cyber capabilities. China's military investments provide it with a growing ability to project power at increasingly longer ranges. In 2013, this included at-sea testing of China's first aircraft carrier and continued development of fifth generation fighter aircraft. During his visit to California in June 2013 for a summit with President Obama, China's President Xi Jinping and President Obama affirmed that China and the United States should continue working together to build a "new model" of relations in order to expand practical areas of cooperation and constructively manage differences in the bilateral relationship. During a robust number of high-level U.S.-China political and military engagements in 2013, leaders from both countries agreed that "enhanced and substantive" military dialogue and communication would foster greater understanding and expand mutual trust. Within that framework, the U.S. Department of Defense seeks to continue building a military-to-military relationship with China that is sustained and substantive, while encouraging China to contribute constructively to efforts with the United States, our allies and partners, and the greater international community to maintain peace and stability. As the United States builds a stronger foundation for a military-to-military relationship with China, it also will continue to monitor China's evolving military strategy, doctrine, and force development and encourage China to be more transparent about its military modernization program. In concert with its allies and partners, the United States will continue adapting its forces, posture, and operational concepts to maintain a stable and secure Asia-Pacific security environment.