Beijing was actively building up its armed forces and would be strong enough by 2020 to launch an invasion of Taiwan, a military report said yesterday.

Despite closer political ties, the mainland was "continuing to accumulate large-scale war capabilities, with the threat of a cross-strait military conflict continuing to exist", Taiwan's "2015 National Defence Report" said.

The mainland's annual military spending has grown on average by double-digit rates over the past decade, second only to the United States, it said.

A photo of Chinese President Xi Jinping is seen behind soldiers of China's People's Liberation Army during a training session for a military parade to mark the 70th anniversary of the end of the World War Two. Photo: Reuters

The biennial report published by the defence ministry said Beijing was strengthening its naval and air forces in the region to deter foreign forces from intervening in any invasion.

"[Mainland] China believes foreign interference would be its biggest concern if it attacks Taiwan," it said.

Relations between the once bitter rivals have warmed since Taiwanese president Ma Ying-jeou of the mainland-friendly Kuomintang party came to power in 2008. But Beijing still sees Taiwan as a renegade province and refuses to renounce the use of force should it declare formal independence.

The defence ministry said there was a risk of Taiwan letting its guard down because of increased economic and cultural exchanges in recent years.

"[The mainland] is diversifying its Taiwan strategy, forging positive [cross-strait] developments, giving them an advantage for any future attacks on Taiwan," the report said.

Taiwan will elect a new president in January, with the candidate of the pro-independence opposition Democratic Progressive Party, Tsai Ing-wen, tipped to win.

She has pledged to maintain the status quo if she wins but some analysts have questioned whether cross-strait peace could be maintained.