WASHINGTON — China is pressing a long-range modernization of its military, part of a strategy aimed at maximizing its leverage over Taiwan, extending its influence farther abroad, but avoiding conflict around its borders or with the United States, the Pentagon said on Friday in an annual report to Congress.

Chinese leaders, the report asserted, view this as a time to “focus on internal development while avoiding direct confrontation,” although they expect tension, competition, and territorial flare-ups from time to time, and they do not expect the status quo, however satisfactory they find it, to last indefinitely.

The United States, decades ahead technologically, spends much more, and in pivoting its strategy toward Asia and the Pacific, “seeks to build a military-to-military relationship with China that is healthy, stable, reliable, and continuous,” the annual report said.

Two months ago, Beijing announced an 11.2 percent increase in its annual military budget to roughly $106 billion. While economic comparisons and analysis have always been difficult, there is no doubt that the past few decades have seen steady expansion in China’s military spending, and the Pentagon’s estimate is that China is investing more than it says, but still only about a fourth of what the United States spends each year on the military.

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For its money, China is getting more weapons, and better ones.

Its air force is “transforming into a force capable of offshore offensive and defensive operations,” the report said, with prototypes of a stealth fighter seen starting last year. Other areas of investment include defenses against ballistic missiles, early warning and air-defense missiles, and their land and naval equivalents.