The first publicly observed flight of the Chengdu J-20 stealth fighter in January and the more recent emergence of the ex-Soviet Varyag aircraft carrier demonstrate China’s progress toward becoming a modern military power by 2020. But China’s ability to project force outside the region remains limited in the near term, the U.S. Department of Defense (DoD) advises in its annual report to Congress on Chinese military developments. The fifth-generation J-20 eventually will give the Chinese People’s Liberation Army (PLA) air force “a platform capable of long-range, penetrating strikes into complex air defense environments,” states the report, released in August. But the DoD says it does not expect the J-20 to achieve effective operational capability before 2018. It says China faces several hurdles to production, “including the mastery of high-performance jet engine production.” China also is upgrading its B-6 bomber fleet with a new, longer range variant that will be armed with a new long-range cruise missile, the report says. It is developing several airborne early warning and control aircraft types. There is “general consensus” that China’s global interests are driving an increase in long-range transportation and logistics capabilities of the PLA air force. In February, China dispatched four IL-76 transports to help evacuate Chinese citizens from Libya, its first such overseas deployment. The Kuznetsov-class carrier Varyag, acquired from the Ukraine in 1998, started sea trials off the northern seaport of Dalian on August 10. The DoD says the carrier could be operationally available–though without aircraft–by the end of 2012. “It will take several years for an operationally viable air group of fixed- and rotary-wing aircraft to achieve even a minimal level of combat capability,” the report says. Nevertheless, the DoD expects China to begin building indigenous aircraft carriers, and notes that flight-testing of the carrier-based Shenyang J-15 fighter is progressing. Despite its global aspirations, China’s primary focus in the next decade will remain on challenging Taiwan and U.S. forces in East Asia, the DoD says. China bases 490 combat aircraft within unrefueled range of Taiwan and has the airfield capacity to expand that number by hundreds, according to the report.