Beijing, China (Reuters): China 's largest missile manufacturer is developing military drones with stealth expertise that can elude anti-aircraft weapons, another progress for the country's ambitious military modernization program, the official China Daily reported on Thursday

Wei Yiyin, deputy general manager of China Aerospace Science and Industry Corp (CASIC), told the English language newspaper, "Drones have become an indispensable weapon in modern warfare because they can play an important role in high-resolution reconnaissance, long-distance precision strikes, anti-submarine operations and aerial combat."

Insisting it has no hostile intent, China is investing billions of dollars to update ageing equipment and develop new weapons, including stealth fighters and aircraft carriers.

Its heavy defense spending, however, has unnerved a region already on guard over Beijing's more assertive approach to disputes in the South and East China Seas and over self-ruled Taiwan, claimed by China as a wayward province.

The deputy GM of CASIC stated that his company was also developing near-space and long-range endurance drones .

The paper also described CASIC as the country's sole producer of cruise missiles , and said the drones also resembled cruise missiles .

China has stepped up research into military drones , hoping to take market share from the United States and Israel with its cheaper technology and willingness to sell to countries that Western states are reluctant to deal with.