China continues to build its military to be the leading player in its region and has a goal of being able to deter the U.S. in a “cross-Strait crisis” with Taiwan by 2027, the U.S. intelligence community (IC) says in its latest unclassified Annual Threat Assessment.

A year ago, in the 2022 threat assessment, the IC didn’t specify a year when China expects to have sufficient military capabilities to “deter U.S. intervention in a future cross-Strait crisis,” as the Office of the Director of National Intelligence says in a report released on Wednesday.

On the subject of weapons of mass destruction, the 2023 assessment continues to highlight that China isn’t interested in arms control agreements that would leave it at a disadvantage relative to the U.S. or Russia, but it notes that Beijing “is reorienting its nuclear posture for strategic rivalry with the United States because its leaders have concluded that their current capabilities are insufficient.” China is also concerned that ongoing nuclear weapons modernization by the U.S. “has increased the likelihood of a U.S. first strike.”

China’s improving nuclear posture “is likely to bolster its resolve and intensify conventional conflicts,” the new assessment says. The report was issued in conjunction with a hearing hosted by the Senate Intelligence Committee on worldwide threats.

China’s goal in the area of space is to “match or surpass the United States by 2045,” the IC says. The 2022 report noted Beijing’s goal of equaling or besting the U.S. in space but didn’t offer a timeline. The latest report also says that, by “2030, China probably will achieve world-class status in all but a few space technology areas.”

The 2023 report also puts a focus on China’s commercial space sector, which by 2030 will “become a major global competitor,” aided by the country’s policies that foster investment and have attracted “a broad range of firms” to the market. China’s state-owned enterprises are, and will be, the dominant players in the country’s commercial sector, the report says.

Some of the companies in this space will try to service “niche markets” that have little or no competition, the report says, pointing to “hyperspectral imaging” as one such capability. Chinese firms “will also continue attempts to undercut the price of Western firms in more competitive markets,” the IC says.

The 2022 threat assessment was released in early February just over two weeks before Russia’s unprovoked invasion of Ukraine. That report highlighted that massing of Russian troops on Ukraine’s border in preparation for a military attack.

“Russia’s unprovoked war of aggression against Ukraine is a tectonic event that is reshaping Russia’s relationships with the West and China, and more broadly in ways that are unfolding and remain highly uncertain,” the 2023 assessment says. “Escalation of the conflict to a military confrontation between Russia and the West carries the greater risk, which the world has not faced in decades.”

The IC doesn’t believe that Russia wants to go to war with the U.S. and NATO, although the potential for such a conflict exists.

“Russian leaders thus far have avoided taking actions that would broaden the Ukraine conflict beyond Ukraine’s borders, but the risk of escalation remains significant,” the IC says.

The report also notes that Russia’s military failures against Ukraine could damage Russian President Vladimir Putin’s “domestic standing,” leading to more aggressive “escalatory actions by Russia in an effort to win back public support.”