China is experiencing extremely rapid changes in every element of its national power; economic, political, and military. Its economy is booming, producing double digit gains each year since the mid-1980s. This explosive growth raises the prospect of China emerging as a major global power. To help protect this potential new status, Beijing decided to modernize its military to ?gain respect? in the world community and become militarily competitive with other global powers. This resulted in a nation possessing one of the fastest growing economies in the world combined with one of the largest military machines; that is slowly gaining an offensive force-projection capability. These factors may upset the balance of power in the Asian region, in addition to posing a threat to U.S. interests. This paper examines the implications for U.S. and regional security posed by the economic reforms and the military modernization taking place in China, focusing on Chinese acquisition and indigenous production of high-technology weapons to produce an offensive force projection capability. After surveying the lack of resources available to the Chinese defense industries, it analyzes China's military equipment modernization program and impediments to that program. By assessing the impact of the impediments, it concludes that the economic reform in the People's Republic of China (PRC) has actually slowed military modernization efforts and hindered indigenous defense production. This has reduced the military's possibilities of developing limited or sustained force projection for 15 to 25 years. Thus the U.S. and regional nations have an opportunity to engage China and bring it fully into the world community before it becomes a regional threat.