BEIJING — Of all China’s technological deficits with the West, the one that hurts most acutely is its military dominance by America — and above all the fact that even off its own coast America rules the waves.

No program has been more important to the People’s Liberation Army in the last decade than the development of new submarines.

The issue of aircraft carriers is more complex — China has no realistic hope of matching America’s 11, and although many analysts claim it is currently trying to build one this is by no means certain.

But its strategists believe that under the principle of asymmetric warfare the presence of advanced submarines in the western Pacific is enough to ensure their first goal: deterring America from intervening should they decide to invade Taiwan.

No occupant of the White House, they argue, would risk losing an American aircraft carrier to torpedoes or submarine-launched missiles for the sake of an island so far away from the concerns of the American people.

Beyond Taiwan, a “blue-water fleet” of Chinese vessels characterized by nuclear-powered submarines with or without aircraft carriers could stretch itself further, to protect shipping routes in Southeast Asia. Its economy is increasingly dependent on oil supplies from the Middle East and Africa, as well as its huge export industry.

Of most concern to its immediate neighbors, though, are the waters in the immediate vicinity of Hainan. The South China Sea is dotted with small islands disputed by a number of countries — the Spratleys are claimed not only by China, but Vietnam, the Philippines, Brunei, and Taiwan.

Their current value is small, but their potential, if rumors of underwater oil fields prove to be vindicated, is large.

Further afield there are China’s even more sensitive relations with Japan to consider: the sea border between the two is also disputed, and also crosses a natural gas field.

In November 2006, a Chinese home-built Song-class diesel submarine suddenly surfaced, undetected, in the middle of an American battle group off Japan. It was a clear warning that its naval weakness could not be taken for granted.

China’s navy is still dwarfed by America’s, and will be for years if not decades to come. But in the light of events in Iraq, it knows that in any coming confrontation the psychology of threat is as important as actual size.