China is building a modern and regionally powerful Navy with a modest but growing capability for conducting operations beyond China's near-seas region. The question of how the United States should respond to China's military modernization effort, including its naval modernization effort, has emerged as a key issue in U.S. defense planning. The question is of particular importance to the U.S. Navy, because many U.S. military programs for countering improved Chinese military forces would fall within the Navy's budget.