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Why has China as a rising power prioritized military and technological innovation as a core component of its strategy? What threat perceptions and operational objectives have influenced the direction of Chinese defense armaments development in recent history? Since the 1990s, the People’s Liberation Army (PLA) has concentrated on the U.S. military as a powerful potential adversary, targeting assessed weaknesses and vulnerabilities in American ways of war-fighting, while heavily investing in new strategic technologies in which the PLA perceives the potential to achieve an advantage. Increasingly, the PLA assesses that the character of conflict is changing in ways that could disrupt the current military balance. In his capacity as Chairman of the Central Military Commission, Xi Jinping has called for China to take advantage of military and technological revolutions that are perceived a historic opportunity to achieve global leadership, while urging the PLA to become a “world-class” military. This paper will evaluate these trends and dynamics in the context of power transition theory, considering how the Chinese military’s approach to technology and innovation has been shaped by its particular circumstances as a rising power confronting the threat of conflict with a superpower possessing perhaps unparalleled capabilities. My analysis will be informed by existing theories of military innovation, including to consider the influence of Chinese strategic culture, Party-Army relations, and organizational dynamics. In the process, this paper will draw upon a range of data, primary sources, and interviews with Chinese military officers. This paper will thus contribute to the literature on Chinese military innovation and U.S.-China power transition.