The Pentagon has been raising alarms over China's military modernisation for several years. Rumsfeld's rhetorical assault, in a speech to a conference of regional defence ministers, underscores a growing concern in the United States over China's rising military, economic and diplomatic power.
But facing an audience anxious about a possible US-China confrontation in Asia, Rumsfeld toned down parts of his prepared speech and insisted Washington sought neither to destabilise China nor fan a competition for regional influence.
"China appears to be expanding its missile forces, allowing them to reach targets in many areas of the world, not just the Pacific region, while also expanding its missile capabilities within this region," he told an annual conference hosted by the International Institute of Strategic Studies.
"China also is improving its ability to project power, and developing advanced systems of military technology," he said.
"Since no nation threatens China, one must wonder: Why this growing investment? Why these continuing large and expanding arms purchases? Why these continuing robust deployments?"
One line dropped from the prepared text said: "One might be concerned that this buildup is putting the delicate military balance in the region at risk -- especially, but not only, with respect to Taiwan."
The United States itself has vastly boosted defence spending since the Sept.11 attacks. Some experts say China's military increases can be expected of a growing power.
During a question and answer session, a Chinese foreign ministry official asked if Rumsfeld really believed China faced no threat and if the United States felt threatened by China.
"I don't know of nations that threaten China," Rumsfeld said, adding: "No, we don't feel threatened by the emergence of China. It strikes me that the emergence of China is perfectly understandable."
But he said China's continued economic growth "will require an openness that will put a pressure on a political system that is less free and there will be a tension over time."
When asked whether his comments meant China's rise was replacing the war on terrorism as the top US concern, Rumsfeld said, "the struggle against extremism is not over" and that China's rise was an inevitable and largely positive development.
He also said that it was "flat wrong" that America wanted to destabilise China because this would not be good for the Chinese people or the region.
Analysts attending the conference told Reuters the speech was less critical of China than they expected.
"We're still left with a sense that he's clearly worried about China. But he's not saying what the United States is prepared to do about it," said Jonathan Pollack, a professor at the Naval War College in Newport, R.I.
Rumsfeld spoke as the Pentagon prepared to release its annual assessment of China's military expenditures.
Last year, it reported China expanded its military buildup with more sophisticated missiles, satellite-disrupting lasers and underground facilities, all aimed at winning a possible conflict with Taiwan and exerting power.
It said Beijing had more than 500 short-range ballistic missiles opposite Taiwan and its defence spending of $50 billion to $70 billion is third behind the United States and Russia.
While new Pentagon figures are not yet public, the RAND Corp., a research group that often works for the military, reported that the Defence Department may have overestimated China's total military spending by more than two-thirds.
But CIA Director Porter Goss said recently China's military buildup was tilting the balance of power in the Taiwan Strait.
After the Sept. 11, 2001 attacks, the Bush administration often extolled improving Sino-American relations, triggered in part by anti-terror cooperation.
But increasingly, disputes over China's currency rates, its refusal to lean harder on North Korea to return to six-party nuclear talks and trade issues have come to the fore.