His comments come after reports China tested possibly two nuclear-capable weapons which could evade American defence systems.
The launches are believed to have occurred between June and August this year.
One is suspected to be a nuclear-capable hypersonic weapon now orbiting in space.
Beijing has denied it conducted any missile tests claiming the incidents in question were related to the launch of a spacecraft.
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Speaking to Bloomberg News General Milley confirmed China’s military capabilities were “expanding rapidly” as tensions escalate between Washington and Beijing.
“What we saw was a very significant event of a test of a hypersonic weapon system and it is very concerning,” he said.
“I don’t know if it’s quite a Sputnik moment, but I think it’s very close to that. It has all of our attention.”
Bloomberg News reported the next-generation technology could be used to launch nuclear weapons over the South Pole and evade US anti-missile defence systems in Europe.
Hypersonic warheads are designed to avoid missile defence systems through speed and flexible movement.
The weapons travel at five times the speed of sound.
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General Milley’s comment comparing China’s hypersonic weapons test to the launch of the satellite Sputnik by the Soviet Union refers to a key moment in the Cold War.
The 1957 launch of Sputnik came as a surprise for Americans who saw it as a sign the Soviet Union had gained a technological advantage.
President John F Kennedy later declared the US would land men on the Moon – a goal achieved in less than a 10 years.
Speaking about hypersonic weapons, Pentagon spokesman John Kirby said “this is not a technology that is alien to us, that we haven’t been thinking about for a while.”
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Only last week the US tested three hypersonic missiles at a NASA facility in Virginia
General Milley warned China’s military had progressed from its “peasant-based” roots to become a “very capable military that covers all the domains and has global ambitions”.
The Biden administration has described the relationship between Washington and Beijing as one of “strategic competition”.
China is currently on track to build the biggest economy in the world by the end of the decade with a large enough military to present a threat to the United States.
Beijing has boosted its naval force, funded programs to increase its nuclear strike capacity and claimed it will take a tough line towards any who stand against China.

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