Deputy Defense Secretary Robert Work told to a group of military and civilian aerospace experts that China was "quickly closing the technological gaps."
He said Beijing is developing radar-evading aircraft, advanced reconnaissance planes, sophisticated missiles and top-notch electronic warfare equipment, Reuters reported.
When it comes to military capabilities, China "continues to improve at a very impressive rate," Work added.
In fact, the United States is so concerned with China's rapidly developing capabilities that it established the China Aerospace Studies Initiative (CASI), a joint venture between the US Air Force and the RAND Corporation think-tank aimed at uncovering Beijing's aerospace goals.
"As the Department of Defense, we're the hedge force…. We say, 'Look, here are capabilities that we see that the Chinese are developing and it's important for us to be able to counter those,” he said at the CASI inaugural conference.
Citing a Harvard study on rising powers confronting established powers, Work said such interactions often result in war, Reuters reported. Therefore, the Defense Department must "hedge against this international competition turning more heated."
Traditionally, the United States has felt the best way to avoid such a conflict is by keeping a strong nuclear and conventional deterrence superior to that of any rival, he added.
Work said the United States has relied on technological superiority for the past 25 years, but now "the margin of technological superiority upon which we have become so accustomed… is steadily eroding."
To adjust, he said, the Pentagon is working to develop new technologies to maintain its edge and lower the cost of responding to attacks, Reuters reported. Directed energy weapons, for example, might be able to shoot down missiles that cost a hundred times the price of a jolt of energy.