Mr Rumsfled questioned China's military intentions

During a visit to Beijing, Mr Rumsfeld said that China's recent increases in its defence budget were raising suspicions about its intentions.

But China's Defense Minister Cao Gangchuan said China's priority was economic not military growth, and denied spending was understated.

After holding talks with Mr Cao, Mr Rumsfeld met President Hu Jintao.

Their discussions were expected to cover issues including North Korea, Taiwan and defence links between Washington and Beijing.

Mr Rumsfeld is also due to visit China's Second Artillery Corps at Qinghe outside Beijing, making him the first US official to visit the complex.

It is not necessary or even possible for us to massively increase the defence budget Cao Gangchuan

The trip comes ahead of a planned visit to China next month by US President George W Bush.

Intentions 'questioned'

Mr Rumsfeld visited the Central Party School, which trains future Communist leaders, on Wednesday morning.

In a speech, he expressed concerns about the perceived secrecy surrounding China's military.

"Many countries... have questions about the pace and scope of China's military expansion," he told students.

"A growth in China's power projection understandably leads other nations to questions China's intentions, and to adjust their behaviour in some fashion.

"The rapid and... non-transparent nature of this build-up contributes to their uncertainty."

But China's defence minister denied there had been a build up.

"It is not necessary or even possible for us to massively increase the defence budget," Mr Cao said.

China's official military spending this year is $30bn, but the Pentagon said in June that the real figure was $90bn.

China has consistently increased its defence spending since the 1990s, but Chinese officials say the increase is needed to modernise its armed forces and pay better salaries.

China also says its budget is dwarfed by US military spending, which last year totalled $440bn.

The US says China's emergence as a major power could alter the military balance in the region.

The US is particularly concerned about a build-up of Chinese missiles pointed at Taiwan, which it has threatened to seize by force if the island moves towards formal independence.