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Former New York City mayor Rudy Giuliani said yesterday that the U.S. must expand its military to fight terrorism and prepare itself as China becomes more powerful.

"One of the ways to ensure that China's rise is a peaceful rise . . . is to be so militarily strong that it doesn't make practical sense for China to invest as much as it would have to invest to catch us," he told more than 100 business leaders gathered at the Politics and Eggs forum in Bedford.

Giuliani also defended his record on immigration, taxes and welfare and said the United States must do a better job of explaining itself to the rest of the world. Countries that resent America don't understand us, he said.

"Maybe sometimes we are too arrogant," he said. "Sometimes we want things faster than they can be, and sometimes we assume that people understand our wonderful motives when they don't necessarily understand that. You've got to explain it to them, and I think that that is the core of diplomacy."

Giuliani, 63, wrapped up a long weekend in New Hampshire, where he toured the state in his campaign bus, stopped at local eateries and held two town hall meetings. Throughout the weekend, he traded criticisms with former Massachusetts governor Mitt Romney, who leads the Republican candidates in polls in New Hampshire.

Giuliani criticized Romney's record on fiscal discipline, health care and fighting crime, saying Romney "kind of runs away from his record as governor."

"Look, he doesn't want to do the same health care plan for the rest of the country that he did for Massachusetts," he told reporters after speaking at the Bedford Village Inn. "The . . . difficult thing for him to explain is why murder went up, burglary went up and some of the other . . . violent crimes that went up when he was governor."

According to FBI crime statistics, violent crime decreased about 7 percent in Massachusetts during Romney's tenure, from 31,137 incidents in 2002 to 28,701 incidences in 2006. However, murders increased from 173 in 2002 to 186 in 2006. Rapes and aggravated assault (the largest proportion of violent crime in Massachusetts) decreased.

Eric Fehrnstrom, national spokesman for Romney, said Giuliani has "nothing positive to offer on the issue of health care."

"Other candidates talk about getting health care to more citizens, but only one person has actually done it, and that's Mitt Romney," Fehrnstrom said in a statement. "We are on track to cover all our citizens in Massachusetts without raising taxes and without a government takeover."

The New England Council, an alliance of schools, hospitals and corporations, co-sponsored the Politics and Eggs speaking event with the New Hampshire Political Library.

New England Council President Jim Brett introduced Giuliani as "Gotham's action hero." Giuliani laughed and said he'd go change in a phone both, alluding to the comic book character Superman, who lived in Metropolis. Giuliani's voice was hoarse, and he seemed worn out from his travels.

When asked why he extended education and health care benefits to illegal immigrants during his tenure as New York City mayor, Giuliani said he didn't have the power to deport all of the city's illegal immigrants.

"I'm a practical guy," he said. "I have a responsibility for the safety and security of 8 million people on my shoulders. . . . If you have 400,000 illegal immigrants in New York City, you probably have 50,000 to 60,000 children. Do you leave them at home, or do you let them go to school? Which would be the more intelligent thing for a mayor to do?"

He added, "Somebody walks into the public hospital system with a serious illness. Do you turn your back on them and let them go out on the street and die? Do you turn your back on them if it's a communicable disease? Is that an intelligent thing to do? Of course not." (next page »)