But Beijing dismissed the review as "presumptuous speculation", saying China had strictly followed a "no first use" policy - meaning it would not use nuclear weapons unless it was attacked with them - and had been "always extremely restrained" in its nuclear weapons development.
The report said the USA strategy for China is created to "prevent Beijing from mistakenly concluding that it could secure an advantage through the limited use of its theatre nuclear capabilities or that any use of nuclear weapons, however limited, is acceptable".
The Chinese government has criticized a Pentagon document known as the "Nuclear Posture Review", which outlines the strategy to expand US nuclear capacity and identifies China - along with Russia, Iran and North Korea - as potential nuclear adversaries.
China said on Sunday it "firmly" opposed the Pentagon's review of United States nuclear policy. It overturns years of Obama-era policy that sought to reduce the size and power of the United States' nuclear arsenal.
Although the review largely focuses on Russian Federation, several sections are dedicated to the lack of transparency in China's nuclear buildup. Low-yield weapons with a strength of under 20 kilotons are less powerful but are still devastating.
Meanwhile in a brief editor's note last week, China's military mouthpiece PLA Daily called for an expanded nuclear stockpile so that the country could better deter and hit back at enemy strikes at a time of geopolitical uncertainty, and as the USA appeared bent on a nuclear build-up.More news: Financial markets on track for worst week in 2 years
He said the USA is playing up the threat of its nuclear strength.
Russia's foreign minister called the move "confrontational" and expressed "deep disappointment".
Soon after, Russian Foreign Minister Sergei Lavrov said he was "disappointed" by the document for its "confrontational and anti-Russian character", while Iran claimed USA policy would bring the world "closer to annihilation".
The Nuclear Posture Review (NPR) envisages short-term plans to modify existing submarine-launched ballistic missile (SLBM) warheads to provide a low-yield option and pursue a modern nuclear-armed sea-launched cruise missile (SLCM) in the long run.
This isn't the first time that China has used the Cold War label to denounce US policy.
In a statement issued by China's Ministry of Defence on Sunday, the United States was urged to drop its "Cold War mentality" and not misread its military build-up.