The Chinese military is advancing capabilities for conducting "gray zone" operations, aggressive acts that fall short of an armed attack, in contested waters, the Defense Ministry's think tank has warned.

China's Communist Party has been strengthening the armed forces and nonmilitary organizations via restructuring and reforms under the leadership of President Xi Jinping, the National Institute for Defense Studies said in its China Security Report 2023 on Friday.

Beijing is seeking to "create gray zone situations constantly and exert pressure on opponents as it avoids military clashes with other countries," the annual report said.