The Chinese navy could have its first aircraft carrier as soon as 2010, according to reports which will add to Pentagon concerns about the country's military expansion.

The claim, made in the Government-backed Wen Wei Po newspaper, will alarm Pentagon hawks who fear China wants to mount a challenge to American dominance of the Pacific.

China's intent to add an aircraft carrier to its navy comes in the wake of its recent military budget, which revealed annual spending would rise by 17.8 per cent, the highest rate for five years.

The build-up has come under attack in Washington, in particular for the secretive manner in which China has gone about it.

The deputy secretary of state, John Negroponte said Washington was "dissatisfied" with the level of transparency in Chinese military planning.

The Pentagon's greatest concerns remain entwined with Chinese historic threats to retake Taiwan by force. Particulalry as China's naval development is also being matched in other military spheres.

Recently it unveiled its new, self-built J-10 fighter aircraft. And, in addition, about 15 per cent of the nation's 2.3 million-strong army have been expressly selected as an elite force capable of "taking the fight to the enemy". What is more, it possesses increasingly sophisticated long-range nuclear missiles, now capable of hitting American cities.

The test-firing of a missile in January is thought by military experts to be part of a strategy to develop an "asymmetric" balance in response to overwhelming American power.

"You don't try to put up as many satellites as the US, you try to negate the usefulness of those they have," said Robert Karniol, Asia editor of Jane's Defence, the military affairs magazine. "It's cheaper, and the Chinese learned the lesson of the bankruptcy of the former Soviet Union."

However, Chinese officials point out that their military spending is "commensurate" with the size of their economy, and that it remains dwarfed by that of the US. A Chinese vice-admiral quoted by Wen Wei Po, said: "This is China's own business. Exaggerations of the so-called 'China threat' are just spin and malice."