BEIJING, Jan 9: Chinese President Jiang Zemin has asked his country's armed forces to be in a state of combat readiness and undertake modernisation to face challenges posed by rapid changes in modern warfare.``We must carry out a military modernisation drive and be prepared for the possibility of a military confrontation,'' Jiang, also general secretary of the ruling Communist Party and commander-in-chief of the Chinese army, said in a recent speech released yesterday by the official Xinhua news agency.Stating that preparing for the danger of war was correct, Jiang said China faced serious political and military threats from the blockade and hostilities from outside.He indicated that China considered the United States a threat to its security. ``Hegemonism and power politics still exist,'' he said, reflecting the communist code words for US dominance over world affairs.Jiang, who has established absolute control over the communist party, military and government, made these comments on December 25 ata meeting of senior military commanders.A major contradiction facing the Peoples Liberation Army (PLA) was the incompatibility between China's modernisation level and the demand for modern warfare, he said, adding the army must centre on its modernisation drive to enhance its combat readiness.China denies high-tech gainsWASHINGTON: China's ambassador to Washington blasted a Congressional report alleging that China gained high-tech secrets with deals to launch US satellites. Ambassador Li Zhaoxing, answering questions in English after a national press club speech on Friday, also accused some Americans of trying to build a wall between China and the United States, which renewed diplomatic relations 20 years ago this month after years of discord. `'They are trying to find a new enemy for America, and they are looking at China,'' Li said. He said the idea that China would steal US secrets is groundless and irresponsible and an insult to Chinese scientists.Li said it was particularly lamentablethat the allegations came from such a high level of government. A House of Representatives report by a special committee unanimously adopted last week said valuable military technology flowed to China by putting US-built satellites into orbit on Chinese rockets. It alleged that technology deals with China over the past two decades have harmed US national security.The Chinese foreign ministry earlier accused the house special committee of a distortion of China's peaceful use of space technology and characterized the report as an attempt to undermine Sino-US relations.The Congressional report has not been made public, but committee leaders outlined its conclusions. ``Such a story is ultimately groundless and irresponsible,'' said Li. There was no need for China to steal knowledge from America . nor the possibility,'' he said. Chinese scientists, he said, do not need to rely on American wisdom.''