"We also need the atom bomb," he said.

"If our nation does not want to be intimidated, we have to have this thing."

China's annoucement that it has developed neutron bomb capabilities has come two months after the US Government published a damning report into how China systematically targeted its nuclear secrets over 20 years - and apparently got away with a lot of them.

The events reveal the policy at the heart of the nation's defence thinking - that of an absolute determination to keep pace with the world's leading nuclear powers.

'Dual threat'

In the aftermath of World War II China saw itself as being threatened by the Soviet Union and America which had vastly increased its influence following the defeat of Japan.

China stiffened its resolve to develop its own independent nuclear capability after the Taiwan Straits crisis of 1954-55 when it believed that the USA was willing to use nuclear weapons to defend the island - but the USSR was not prepared to back China with similar force.

In a paper written in 1989, Major General Yang Huan, wrote that the nation's intent had always been defensive.

"China's strategic nuclear weapons were developed because of the belief that hegemonic power will continue to use nuclear threats and nuclear blackmail," wrote the former Deputy Commander of one of China's strategic rocket forces units.

"To oppose nuclear war, smash nuclear blackmail, safeguard national security and sovereignty, and keep peace throughout the world, China needed its own strategic nuclear weapons."

First weapons

China joined the exclusive club in October 1964 when it conducted its first atomic test at Lop Nur, the beginnings of the road to becoming the third largest nuclear power.

Lop Nur 1964: First nuclear test. (FAS)

At the same time, it stressed that it had only sought to develop nuclear weapons in order to defend itself.

China has consistently argued that its nuclear policies prove that unlike the USA and the former USSR it would never gear its military machine towards first strike strategies.

Since the 1964 test, China is believed to have developed a range of nuclear armaments that cover a broad range of scenarios.

The stockpile

The Federation of American Scientists which seeks to monitor worldwide stockpiles of nuclear arms, says China could have up to 2,000 devices.

According to the FAS, US intelligence believes that China tested its first Intercontinental Ballistic Missile (ICBM) after 1974.

Scientists are believed to have improved the DF-5 missile's range to a maximum of 15,000km and its preparation time to under an hour.

Estimates suggest that there are at least 13 deployed ICBMs protected by a network of decoy silos.

The JL-1 is a two-stage submarine launch missile, (SLBM) believed to have been first tested in 1982.

China is believed to have between 12 and 24 of these missiles in a state of readiness.

They have a range of 1,700km and a warhead yield of between 200 and 300 kilotons - 20 times more powerful than the Hiroshima bomb.

The rest of the nuclear arsenal comprises Intermediate Range Ballistic Missiles (IRBM), bombs and artillery linked warheads.

What has changed

While China has been increasing military spending across the entire range of its forces in recent years, it had found it impossible to close the technology gap with the USA - until now.

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The American military pioneered smart-bomb technology, multiple-warhead launch systems and the neutron bomb - a device with explodes with minimum heat but massive radiation, destroying life but leaving cities intact.

If warheads can be made smaller, so can launch systems - and that means more mobility and a greater first-strike strategic advantage.

Before the revelations of the espionage report, the US believed that China's nuclear technologies had moved on little since the 1960s.

But while China has declared that it holds neutron bomb technology, the US also fears that Beijing holds the plans to one of the most recent developments - the W-88 - giving it a huge leap forward in technology.

If recent press statements are anything to go by, then China's intentions are clear.

Senior figures in the Chinese military elite have suggested that there is a simple choice between a "polycentric world" and one dominated by one country, meaning America.

"We cannot be negligent," wrote one general, Li Desheng, in the People's Daily.