The annual assessment of China's military might also notes that while China has not seized much new land to create more man-made islands, it has substantially built up the reefs with extended runways and other military facilities. It has also increased patrols and law enforcement to protect them.
The Djibouti base construction is near Camp Lemonnier, the U.S. base in the Horn of Africa nation. But American military leaders have said they don't see it as a threat that will interfere with U.S. operations there.
"China most likely will seek to establish additional military bases in countries with which it has a longstanding friendly relationship and similar strategic interests, such as Pakistan, and in which there is a precedent for hosting foreign militaries," the Pentagon report said. "This initiative, along with regular naval vessel visits to foreign ports, both reflects and amplifies China's growing influence, extending the reach of its armed forces."
The military expansion ties into a broader Chinese initiative to build a "new Silk Road" of ports, railways and roads to expand trade across an arc of countries through Asia, Africa and Europe. Countries including Pakistan and Afghanistan welcome it as a path out of poverty.
But India and others would be unhappy with additional Chinese development in Pakistan, particularly anything linked to the military.
China has cited anti-piracy patrolling as one of the reasons for developing what it calls a naval logistics center in Djibouti. Construction began in February 2016. Beijing has said the facility will help the army and navy participate in United Nations peacekeeping operations and provide humanitarian assistance.
But the expanded presence around the world would align with China's growing economic interests and would help it project military power further from its borders.
The report cautioned, however, that China's efforts to build more bases "may be constrained by the willingness of countries to support" the presence of China's People's Liberation Army in one of their ports.
Unlike previous reports, the new assessment doesn't document a lot of new island creation by China in the East and China Seas. Last year's report said China had reclaimed 3,200 acres of land in the southeastern South China Sea.
Instead, the new report focuses on the military build-up on the Spratly Islands in the South China Sea.
It said that as of late last year, China was building 24 fighter-sized hangars, fixed-weapons positions, barracks, administration buildings, and communication facilities on each of the three largest outposts -- Fiery Cross, Subi and Mischief Reefs. Each has runways that are at least 8,800 feet long.
Once complete, the report said China will be able to house up to three regiments of fighters in the Spratly Islands.
China has also built up infrastructure on the four smaller outposts, including land-based guns and communications facilities.
The report added that, "China has used coercive tactics, such as the use of law enforcement vessels and its maritime militia, to enforce maritime claims and advance its interests in ways that are calculated to fall below the threshold of provoking conflict."