Yang voiced "strong dissatisfaction" and "firm opposition to the report, the Xinhua news agency reported.
"The report does not hold water as it severely distorted the facts," Yang said.
U.S. Deputy Assistant Defense Secretary Michael Schiffer, in a media briefing Tuesday on the Pentagon report, said China's expanding military capabilities have allowed it to contribute to activities such as international peacekeeping and fighting piracy, but he also warned its military capabilities are potentially destabilizing to regional military balances and increase the risk of misunderstanding and miscalculation.
Yang said the Pentagon report turned a blind eye to facts, played up the so-called Chinese mainland's "military threat" to Taiwan and made groundless claims on China's policies on space and network security.
Yang said China's defense building "is solely to safeguard its own sovereignty and territorial integrity … and does not target any country".