– RAND – Over the past two decades, China’s People’s Liberation Army (PLA) has transformed itself from a large but antiquated force into a capable, modern military. A RAND Project AIR FORCE report assesses trends in the relative capabilities of U.S. and Chinese forces in diverse operational areas, and at varying distances from the Chinese mainland, between 1996 and 2017. The overall conclusion is that although China continues to lag behind the United States in terms of aggregate military hardware and operational skills, it has improved its capabilities relative to those of the United States in many critical areas. Moreover, the report finds that China does not need to catch up fully to the United States to challenge the U.S. ability to conduct effective military operations near the Chinese mainland. To be clear, the goal is to avoid war, which the authors do not anticipate and which would be disastrous for both countries. Rather, this research provides an open-source assessment of trends that could affect U.S. defense and deterrence efforts and establishes a baseline for future analysis.