Deepening Chinese activities in the Arctic region could also pave the way for a strengthened military presence, including the deployment of submarines to act as deterrents against nuclear attack, the Pentagon says.
The assessment, released on Thursday, is included in the US military's annual report to Congress on China's armed forces and follows Beijing's publication of its first official Arctic policy white paper in June.
In that paper, China outlined plans to develop shipping lanes opened up by global warming to form a Polar Silk Road - building on President Xi Jinping's signature Belt and Road Initiative.
China, despite being a non-Arctic state, is increasingly active in the polar region and became an observer member of the Arctic Council in 2013.
That has prompted concerns from Arctic states over Beijing's long-term strategic objectives, including possible military deployments.
The Pentagon report noted Denmark has expressed concern about China's interest in Greenland, which has included proposals to establish a research station, establish a satellite ground station, renovate airports and expand mining.
"Civilian research could support a strengthened Chinese military presence in the Arctic Ocean, which could include deploying submarines to the region as a deterrent against nuclear attacks," the report said.
The Pentagon report noted China's military has made modernising its submarine fleet a high priority.
Its navy operates four nuclear-powered ballistic missile submarines, six nuclear-powered attack submarines and 50 conventionally-powered attack submarines, it said.
"The speed of growth of the submarine force has slowed and will likely grow to between 65 and 70 submarines by 2020," the report predicted.
The United States and its allies, in turn, are expanding their anti-submarine naval deployments across East Asia.
This includes stepped-up patrols of America's advanced, sub-hunting P-8 Poseidon planes out of Singapore and Japan.
