The China Securities Journal - a Chinese state-run financial newspaper - said in 2016 that China could build as many as 20 floating nuclear plants to "speed up the commercial development" of the South China Sea, the South China Morning Post reported a year ago.
The Pentagon report says it expects China's military budget to expand to $240bn over the next 10 years.
As indicated by the "Military and Security Developments Involving the People's Republic of China 2018" report, China boasts 75 to 100 intercontinental ballistic missiles, 16 to 30 intermediate-range ballistic missiles, 200 to 300 medium-range ballistic missiles, and 1,000 to 2,000 short-ranged ballistic missiles, amounting to approximately 2,000 missiles.
It also says that China is pursuing a nuclear capability on its long-range bombers, saying the Chinese air force "has been re-assigned a nuclear mission".
The report also notes that China is working towards the integration of nuclear capabilities for its long-range bombers.
As Thursday's report notes, the PLA is undergoing "the most comprehensive restructure in its history to become a force capable of fighting joint operations".
China's defence spending exceeded $190bn in 2017 as the one-party socialist republic seeks to project military power on the global stage, the report said.
The US concerned about China's growing influence in the Pacific, where Washington still plays a major role.
Activities around Taiwan and in the East and South China Sea are also alarming given Beijing's contested interests in these areas.
Overall, the report found that China wants to leverage its economic, diplomatic and strategic strength to "establish regional preeminence and expand the country's worldwide influence".
Several Chinese state-run companies a year ago established a joint venture that aims to strengthen China's nuclear power capabilities in line with its ambitions to "become a strong maritime power", the Post said, citing a statement released by the venture.
The US regularly seeks to demonstrate freedom of navigation with flights over the South China Sea, much of which is claimed by China, and a number of other nations. Titled, "U.S. report on China's military reveals its guilty conscience", the editorial states, "The U.S.' technical analysis of the PLA capability is one thing, the Pentagon's publication of the analysis to hype the "China threat" is another".
The document warns that China "is likely preparing for a contingency to unify Taiwan with China by force".
Chinese Foreign Ministry spokeswoman Hua Chunying said: "By playing up the so-called China's militarisation in the South China Sea, certain people in the United States are staging a farce of a thief crying "stop thief".
Despite tensions, in June, James Mattis became the first United States defence secretary to visit China since 2014.