The report "Challenges to Security in Space" examines the space and counter space programmes that could challenge the United States or partner interests in the space domain.
"China upholds the peaceful use of outer space and opposes weaponising outer space or an arms race there", foreign ministry spokesperson Hua Chunying told reporters at a press conference in the capital, Beijing.
Space-based capabilities are key to all aspects of life in the United States.
Space forms the basis for America's military advantages, and the country can not allow those to decay or be overtaken, according to a Defense Intelligence Agency report titled "Challenges to Security in Space".
The U.S. Defense Intelligence Agency (DIA) said in an assessment on Monday that China and Russian Federation were enhancing counter-space capabilities that would challenge the U.S. military's dominance in that domain.
China operates both a regional and worldwide satellite navigation system.
Additionally, Russia and China now have "enhanced situational awareness, enabling them to monitor, track and target US and allied forces", the report said.
Running into more than 40 pages, the report mentions India a few times and describes China and Russian Federation as a major challenger to the US, Iran and North Korea as other space challenges.
"Beijing and Moscow will continue to see space as integral to winning modern wars".
They both acquired counterspace services that could challenge space-based military assets. China established a strategic support force to integrate its space, cyberspace and electronic capabilities. It also mentions Iran and North Korea as countries with emerging space capabilities.
One threat is a result of the successes in space. The agency goes on to claim that the Chinese military is probably attempting to build a laser weapon system that can "disrupt, degrade, or damage", orbital satellites and the sensors they use.
"The number of satellites and debris on orbit will grow concurrently, making tracking satellites, discriminating threats from non-threats, and predicting and preventing collisions a greater challenge", it said.
Last month, the Defense Intelligence Agency released a report about China's military capabilities, warning that the Asian country was making advances in counterspace technology that could threaten US satellites responsible for communications, reconnaissance, Global Positioning System and early warnings of missile launches.
When Americans think of space, they think of NASA and space exploration, but they do not necessarily think of all that space brings to their daily lives, the DOD official said.
Space has had a profound impact on the military, the official added, allowing American service members to anticipate threats, respond to crises and to project power globally with fewer troops deployed and less collateral damage.
"Space is fundamental to USA prosperity", the Pentagon official said.