China condemned the US Defense Department's annual report on the Chinese military on Sunday, calling it deliberate distortion that has "severely damaged" mutual trust.

In its annual report to Congress on Chinese military activities, the US Defense Department said on Friday that China is expected to add substantial military infrastructure, including communications and surveillance systems, to artificial islands in the South China Sea this year.

China's Defense Ministry spokesman Yang Yujun expressed "strong dissatisfaction" and "firm opposition" to the Pentagon report and said it has "severely damaged mutual trust", state news agency Xinhua reported.

The report "hyped up" China's military threat and lack of transparency, "deliberately distorted" Chinese defence policies and "unfairly" depicted Chinese activities in the East and South China seas, Yang was quoted as saying.

"China follows a national defense policy that is defensive in nature," Yang said, adding that the country's military build-up and reforms are aimed at maintaining sovereignty, security and territorial integrity and guaranteeing China's peaceful development.

It is the United States that has always been suspicious and flexing its military muscle by frequently sending military aircraft and warships to the region, Yang said.

Despite its calls for freedom of navigation and restraint for peace, the U.S. has pushed forward militarisation of the South China Sea with an "intention to exert hegemony", Yang added.

RECLAMATION WORK

The Pentagon report said the planned addition of military infrastructure would give China long-term "civil-military bases" in the contested waters.

It estimated that China's reclamation work had added more than 3,200 acres (1,300 hectares) of land on seven features it occupied in the Spratly Islands in the space of two years.

The report said China had completed its major reclamation efforts in October, switching focus to infrastructure development, including three 9,800 foot-long (3,000 meter) airstrips that can accommodate advanced fighter jets.

Yang, the spokesman, defended the construction, saying it serves mostly civilian purposes and helps fulfil China's international responsibilities and obligations by providing more public goods.

The Pentagon report comes at a time of heightened tension over maritime territories claimed by China and disputed by several Asian nations. Washington has accused Beijing of militarizing the South China Sea while Beijing, in turn, has criticized increased US naval patrols and exercises in Asia.

The US report renewed accusations against China's government and military for cyber attacks against US government computer systems, a charge Beijing denies. The Pentagon said attacks in 2015 appeared focused on intelligence collection.