WASHINGTON (AP) ― China’s uncompromising attitude in maritime territorial disputes with its neighbors is partly a response to the U.S. strategic rebalance to the Asia-Pacific, according to U.S. intelligence agencies.

In an annual assessment of worldwide threats presented to a Senate panel Tuesday, Director of National Intelligence James Clapper said that the new leaders in Beijing are grappling with a slew of internal challenges that have the potential to spark serious domestic unrest.

So the leaders ― due to be formally appointed in Beijing this week ― are likely to maintain an uncompromising stance on foreign policy issues, especially the disputes in the South and East China Seas, Clapper said.

In the past year, China has ramped up patrols near islands leading to confrontations with the Philippines and Japan, heightening fears of hostilities. Clapper told the hearing that China is supplemented its advanced military capabilities by bolstering its maritime law enforcement in pursuit of its territorial claims.

“Beijing’s regional activities appear to be, in part, a response to the U.S. strategic rebalance toward Asia-Pacific, which Chinese leaders believe is aimed at undermining China’s position in the region,” Clapper’s prepared testimony said.

On Monday, National Security adviser Tom Donilon denied any such intention of the U.S. “pivot” to Asia. He said the U.S. remains committed to the strategic shift, despite budget cuts, as it winds down U.S. involvement in conflicts in the Middle East.

Donilon underscored the importance of a constructive relationship with China, but in the Obama administration’s strongest statement on the issue, called for “serious steps” by Beijing to stop cyber theft. He also said military ties needed to be improved to prevent the risk of an accidental conflict.

Clapper put it bluntly to lawmakers. China “continues its military buildup and its aggressive information stealing campaigns,” he said.

His testimony, which represents the consensus view of U.S. intelligence agencies, concluded China has a growing, but still limited, capacity for projecting its power. He noted the August commissioning of China’s first aircraft carrier and its continued development of advanced ballistic missiles.

China is also working to expand its ability to operate in the Indian Ocean by pursuing logistical support arrangements with countries in the region, he said.

China will continue to dominate production of rare earth elements essential to civilian and military technologies, including development of green technologies and advanced defense systems, Clapper said.

China controls about 95 percent of mined production and refining, he said. Mines in Australia, Brazil, Canada, Malawi, the United States and Vietnam are expected to be operational in less than five years but it will take longer to develop processing capacity outside of China.

He said China enacted a 40-percent export quota cut of rare earths in July 2010, and as of December 2012, rare earth prices remained by at least 80 percent and as much as 600 percent above pre-July 2010 levels.