China’s ongoing effort to expand its international presence economically and militarily has a number of implications for its power and influence, according to a new Pentagon report.

“China’s expanding global activities…present military force posture, access, training, and logistics implications for the United States and China,” says the Congressional-mandated report, Assessment On U.S. Defense Implications Of China’s Expanding Global Access, which was released on Monday. “More broadly, they provide opportunities for political influence.”

The establishment of China’s first overseas military base in Djibouti in 2017 and possible additional ones could provide power projection capabilities for the People’s Liberation Army, the report says.

“These bases, and other improvements to the PLA’s ability to project power during the next decade, will increase China’s ability to deter the use of conventional military force, sustain operations abroad, and hold strategic economic corridors at risk,” the report says.

The report highlights China’s evolving force structure, including a modern Navy, and land-based missile and air forces, is giving the country options to “secure” its foreign interests such as potentially attacking Taiwan and advance its interests in the East and South China Seas.

China’s economic aid and financial investments overseas could also help it influence foreign nations, the report says, adding that the “generous investment financing offers…often come with strings attached” as well as costs. For example, the report says, because of billions of dollars of debt owed by Zambia, China “is poised to take over Zambia’s national power and utility company to collect on Zambia’s financial obligations.”

The report says that the Defense Department doesn’t view all of China’s activities “as a problem” and advocates a whole of government response. It notes that there are countries that have economic needs and that as long as China respects sovereignty of these nations, the U.S. doesn’t oppose that country’s involvement in these countries.

However, the Pentagon cautions that “it is concerned by actions China’s government has taken that are out of step with international norms, diminish countries’ sovereignty, or undermine the security of the United States or that of our allies and partners.”