For the past 20 years, the Department of Defense has produced a report for Congress on the military power of the People’s Republic of China. Much has changed during that time. China’s military capabilities didn’t come close to matching its ambitions two decades ago. Today, the Chinese Communist Party is so confident enough in its gains that Xi Jinping has already announced the beginning of a “New Era” in global affairs. In some areas, the Chinese military has even already surpassed America’s armed forces. That is according to the latest edition of the DoD’s report, which was released this week. 

The U.S. military assesses that China is ahead with respect to shipbuilding, in the production of “land-based conventional ballistic and cruise missiles,” and with respect to integrated air defense systems. The PRC now has the “largest navy in the world,” the “largest standing ground force in the world,” and the “third largest” military aviation forces. 

In short, the days of unquestionable American military supremacy are over. That’s not to say the Chinese are set to dominate the U.S. The CCP faces many challenges ahead, and America still has the lead in some key technologies. But the rise of China’s People’s Liberation Army, Navy and Air Force clearly spooks the U.S. military—and for good reasons. Below are three significant observations drawn from the DoD’s report.

The CCP sees America as its central enemy.