China accepts an invitation from the United States to observe a U.S. military exercise to be held this month in Guam, which has been extended to build ties between the two sides, a Chinese Foreign Ministry spokesman said Thursday.

US Secretary of Defense Donald Rumsfeld is pictured here in Jakarta. China said Rumsfeld's criticisms about a lack of transparency in the Chinese military were unacceptable. [AFP]

"We will accept the invitation and send people to watch" the exercise, Liu Jianchao said at a regular press briefing.

U.S. Pacific Command Commander Adm. William Fallon had invited China to observe the exercise during a visit to China last month, according to the Xinhua News Agency.

Military ties between the two countries have been chilly since the 2001 collision of a U.S. Navy plane and a Chinese fighter jet off China's southern coast, but steps for improvement including military officials' visits have been taken in the recent past.

High-level military consultations between the two countries were also held in Beijing on Thursday.

U.S. Assistant Secretary of Defense Peter Rodman led the U.S. delegation, while Zhang Qinsheng, assistant chief of the General Staff of the Chinese People's Liberation Army, headed the Chinese group, according to Liu.