President Obama has unveiled plans for America's military future, outlining a historic shift towards a smaller and leaner force that will focus on China and move away from large-scale ground warfare that has dominated the post-9/11 era.

Obama became the first president to announce a strategy change directly from inside the Pentagon – a theatrical gesture designed to underline the significance of the shift. Mindful of the dangers of displaying any weakness over national security in an election year, President Obama said he was determined to maintain U.S. military supremacy around the world, but he admitted that the review involved a move to "smaller conventional ground forces" and the removal of "outdated cold war-era systems".

The immediate incentive for the change in tack, set out in a Pentagon strategy paper, is the fiscal crisis and the Congress-led drive for spending cuts. Currently, the Pentagon is under orders to slash $487 billion from the resources it had expected to receive over the next 10 years, and those cuts could rise to close to $1 trillion if Congress fails to reach agreement on alternative reductions by January next year.

Details of the impact of the cuts on military deployments and systems will gradually be rolled out in upcoming budget announcements. For now, President Obama and his main advisers, the Defense Secretary Leon Panetta and General Martin Dempsey, chairman of the joint chiefs of staff, stuck to the highlights.