China appears to be within two years of deploying submarine-launched nuclear weapons, adding a new leg to its nuclear arsenal that should lead to arms-reduction talks, a draft report by a congressionally mandated U.S. commission says.

China in the meantime remains “the most threatening” power in cyberspace and presents the largest challenge to U.S. supply chain integrity, the U.S.-China Economic and Security Review Commission said in a draft of its 2012 report to the U.S. Congress.

China is alone among the original nuclear weapons states to be expanding its nuclear forces, the report said. The others are the United States, Russia, Britain and France.

Beijing is “on the cusp of attaining a credible nuclear triad of land-based intercontinental ballistic missiles, submarine-launched ballistic missiles, and air-dropped nuclear bombs,” the report says.

China has had a largely symbolic ballistic missile submarine capability for decades but is only now set to establish a “near-continuous at-sea strategic deterrent,” the draft said.

Chinese President Hu Jintao has made it a priority to modernise the country’s navy. China launched its first aircraft carrier, purchased from Ukraine and then refurbished, in September.

“Building strong national defense and powerful armed forces that are commensurate with China’s international standing and meet the needs of its security and development interests is a strategic task of China’s modernisation drive,” Hu said in a speech on Thursday at the opening of the Chinese Communist Party’s once-every-five-years congress.

To address a wide variety of security threats, “we must make major progress in modernising national defence and the armed forces,” Hu said.

That means China must “complete military mechanisation and make major progress in full military IT (information technology) application by 2020,” he said.