A report published by the Pentagon this week struck a worried tone over what it described as China's rapid military build-up and said that this posed a credible long-term threat to the United States.

Liu Jianchao, a spokesman for China's foreign ministry, said: "The US defence department's report, which exaggerates China's military strength and expenditure and continues to spread the 'China threat theory', is based on 'Cold War mentality' and ulterior motives."

Efforts by the US to penalise Iran through the UN Security Council over its nuclear programme have been thwarted by China, and by Russia - which America accused this month of retreating on democracy and intimidating its neighbours.

Lie said of the report: "This seriously violates principles governing international relations and rudely interferes in China's internal affairs.

"The Chinese side expresses strong dissatisfaction and firm opposition to this."

The Pentagon said on Tuesday in its annual report on China's military power that the pace and scope of China's modernisation of its forces and other military developments gave it the greatest potential of any nation to compete militarily with the United States.

The report said that China's military expansion has already altered military balances in the Asia-Pacific region where it could potentially pose a threat.

Liu, however, said that China was an important force in promoting regional and world peace.

"China is a peace-loving country, which firmly sticks to the path of peaceful development and adopts a national defence policy of a defensive nature," Liu said.

He said that China relied on its military strength to safeguard its territory, including the island of Taiwan.

Taiwan has been ruled separately since the end of a civil war in 1949. Beijing considers it a part of its territory awaiting reunification.

"As a sovereign nation, it is normal that China develops its national defence in order to protect its national security and safeguard its territorial integrity," Liu said.

Missiles

He said that the US should stop selling weapons to Taiwan, and said Beijing would "definitely not tolerate Taiwan independence" or allow anyone to separate Taiwan from China.

The Pentagon's report said that China was upgrading its long-range ballistic missile force. It said these were capable of striking the United States and most of the rest of the world.

It estimated China's spending at two to three times the country's stated $35 billion defence budget. However, China pointed out that its budget was dwarfed by what the United States spends on its military.

Annual Report to Congress: Military Power of the People's Republic of China - US defence department. Page contains PDF downloads for reports from 2002 to 2006