Defense Secretary Donald H. Rumsfeld (search) issued a blunt challenge to China at a regional security conference Saturday, saying Beijing must provide more political freedom to its citizens and questioning its recent military buildup.

Rumsfeld said the Pentagon's annual assessment of China's military capabilities shows China is spending more than its leaders acknowledge, expanding its missile capabilities and developing advanced military technology. China now has the world's third-largest military budget, he said, behind the United States and Russia.

"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," Rumsfeld said in remarks prepared for the conference organized by the International Institute of Strategic Studies (search). "Since no nation threatens China, one wonders: Why this growing investment?"

The speech represented a direct verbal confrontation with China, given that Beijing (search) sent representatives to the annual conference this year after skipping last year's event. Officials from Taiwan, a self-governing island that China regards as a renegade territory, were not invited.

China has said it will attack Taiwan if the island tries to declare independence, and it repeatedly calls on the United States to stop selling weapons to Taiwan. Beijing denounced a joint U.S.-Japan statement earlier this year saying the two allies shared the objective of a peaceful resolution of the Taiwan issue.

The United States is urging the European Union to keep in place its ban on selling weapons to China. Washington argues that any European weapons sold to China could be used in a conflict over Taiwan.

Rumsfeld also questioned China's government, saying political freedom there has not kept pace with increasing economic freedom.

"Ultimately, China will need to embrace some form of open, representative government if it is to fully achieve the benefits to which its people aspire," he said.

The speech was the strongest criticism Rumsfeld has leveled at China since he took the helm at the Pentagon in 2001.

The previous low point was in April 2001, when a U.S. surveillance plane and a Chinese fighter jet collided in midair, forcing the American plane to land in China. The government released the crew of the Navy plane 11 days later.

Rumsfeld prodded China to use its influence with North Korea to help restart six-nation talks over Pyongyang's nuclear weapons programs. Those talks have been stalled for a year, and U.S. officials worry North Korea — which declared itself a nuclear power earlier this year — may be preparing to test a nuclear bomb.

The defense secretary had even harsher words for North Korea, quoting a European doctor who called the reclusive communist country "a living hell" for all but its elite.

North Korea, Rumsfeld said, is a country where "the children and grandchildren of dissidents are pressed into heavy labor; refugees who escape are kidnapped from other countries and returned to torment; and where the regime builds more and more weapons — while starving citizens search barren fields for individual grains, and many are without clean water."

Similar U.S. criticism of North Korea has sparked an angry response from Pyongyang, which justifies its nuclear programs by saying Washington has a "hostile policy" against it. The state-run Korea Central News Agency this week called Vice President Dick Cheney a "bloodthirsty beast" for saying that North Korean leader Kim Jong Il was irresponsible.

President Bush and other administration officials say the U.S. has no intention of attacking North Korea.

Tensions between the United States and North Korea have been rising in recent months. Last week, the Pentagon suspended its only contact with North Korea — efforts to search for the remains of missing servicemen from the Korean War. U.S. officials said they could not guarantee the search teams' safety in remote areas.

The United States also announced it was sending 15 F-117A Nighthawk stealth fighters to South Korea for what the Pentagon called a long-planned training mission. North Korea said the move was a preparation for war.