China has developed a world-first stealth drone capable of flying for an extensive time and hitting targets with extreme precision, completely undetected.

While China wowed and in some cases scared the world with recent displays of weaponry — including an intercontinental nuclear warhead and a bomber that can refuel in the air — the GJ-11 Sharp Sword drone is particularly worrying as Australia and even the US don't yet have the capabilities to defend against it.

The Sharp Sword is an unmanned combat air vehicle, or UCAV, similar to the Predator drone that's been used by the US in multiple conflicts since it was first introduced in 1995.

What makes the Sharp Sword different is its flying-wing style, giving it stealth capabilities that could allow it to avoid air defence systems.

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China reportedly had a flying prototype in 2013, but the recently displayed model now features a concealed exhaust, making it stealthier.

While China has been boasting the strength of its military in recent days, President Xi Jinping has been championing peace, with a caveat.

He said the country would defend itself if needed, and there was "no force can stop the Chinese people and the Chinese nation forging ahead".

What forging ahead means remains to be seen, as does how the Sharp Sword will fit into that plan.

Lowy Institute's international security program director Sam Roggeveen said the Sharp Sword shown off during yesterday's National Day parade was likely a model. Historically, China has only displayed weaponry and hardware in active use.

China is in the midst of modernising its navy and is preparing its next generation of aircraft carriers, where it's likely the Sharp Sword will eventually be stationed.

"The aircraft carrier program is directed very much at China's neighbours," Mr Roggeveen told news.com.au.

"They want a navy they can use to assert their dominance when the Americans cease to be a major player in the Asia Pacific."

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He said it wasn't realistic to think China's naval expansion was focused on a showdown with the Americans.

"America's might is really built around its navy, China wants to negate its influence in the region and use their own navy to gain advantage," Mr Roggeveen said.

Part of the reason the US has such a strong navy is due to the Two-Ocean Navy Act of 1940, which saw its navy expanded and centred on aircraft carriers.

Carriers were "extremely useful against weaker enemies", Mr Roggeveen said.

One advantage is they essentially operate as a mobile airfield, so they can remain near the conflict but not on the battlefield itself.

China is now in the midst of its own "Two Ocean" strategy, according to a 2017 paper from French geopolitical strategy think tank IRIS.

In the lead-up to the National Day celebrations, China released a new paper boasting of its development and advancement.

What the China and the World in the New Era paper neglects to mention is the country's territorial aims in the South China Sea, while also staying quiet on its tensions with Taiwan, and its recent push to gain further control over Hong Kong that has sparked increasingly violent protests.