The Institute of International Security Studies (IISS) said in its annual report that the Chinese military build-up was not only directed towards Taiwan but aimed at developing force projection capabilities beyond its waters.

In addition, Beijing is forging greater military ties with its main defence partner, Russia, with both countries looking to extend their influence in central Asia and reduce US influence, the report, the "Military Balance", noted.

A total of 2,225,000 people serve in the Chinese armed services; 1,600,000 are in the army; 255,000 in the navy; and 400,000 in the air force.

Some European countries have been in favour of lifting an arms embargo, which was imposed after the repression of a democracy movement in Beijing's Tianenmen Square in 1989, the report said.

But "American pressure", "a greater realisation" of the risks of allowing Beijing access to certain technology and equipment and the passing of anti-secession laws against Taiwan had forced EU governments to change tack.

According to the IISS, the Taiwanese government estimates that by next year, about 1,000 Chinese missiles will be ranged against the island as part of what the think-tank calls the deployment of "overwhelming missile superiority".

China is believed to be developing "smart" systems -- called "Shashoujian" weaponry -- to counter any ballistic defence missile systems Taiwan might deploy and gain superiority in missile technology across the region.

Meanwhile, the People's Liberation Army is said to be learning from the experiences of coalition forces in Iraq and Afghanistan by launching eight new surveillance satellites between 2006 and 2008.

The spy satellites will help in information and cyber warfare and have been developed in addition to an extensive navigation satellite system.

On the ground, amphibious, special forces and airborne units are being enhanced, possibly with the creation of a second Airborne Army, the IISS said.

The Russians are providing the first Airborne Army with a new armoured vehicle capable of being parachuted into combat zones.

Close ties with Moscow will also see the delivery of hardware including fighter jets, amphibious assault ships, fast-attack craft, missile destroyers and eight, new Russian Kilo-class submarines equipped with nuclear warheads.

To further demonstrate the links between the two countries, about 10,000 Russian and PLA military personnel took part in the first bilateral, joint training exercise on the Shangdong Peninsula, eastern China in August.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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