The military advantage in the Taiwan Strait is shifting towards China, whose growing defense spending is "destabilizing" East Asia, a research institute financed by the Japanese government said yesterday. 
"It can be said that the military balance between China and Taiwan is moving in a direction advantageous to China as it is rapidly modernizing its nuclear and missile capabilities as well as its navy and air force," the National Institute for Defense Studies said. 
 
The institute is fully funded by Japan's Defense Agency but its views are not meant to represent the government's. 
 
In its annual East Asian Strategic Review, the institute said that China "is also successfully accumulating experience from military training that has in mind unification with Taiwan by force." 
 
"Although China is not seeking to become a nuclear power equal to the United States, it is likely to continue increasing its capabilities in intercontinental ballistic missiles as well as short-range ballistic missiles unless it abandons the option of unifying Taiwan by force," it said. 
 
It said the expansion and lack of transparency in China's military spending was a "destabilizing factor in East Asia," along with communist North Korea. 
 
"It is necessary to pay attention to the progress in China's nuclear capability and ballistic missile development, as well as China's statements about them and China's views on the United States," it said. 
 
China considers Taiwan, where the mainland's nationalists fled after their defeat to the communists in 1949, to be part of its territory awaiting reunification. 
 
China's relations have also soured recently with Japan in part due to Prime Minister Junichiro Koizumi's visits to a shrine honoring Japanese war dead. 
 
But the report said China's policy toward Japan is not monolithic. 
 
"Although President Hu Jintao (胡錦濤) attaches importance to improving China's relations with Japan, differences may have surfaced within his administration reflecting strongly anti-Japanese public sentiment," it said.