Japan airs concern over China military buildup

TOKYO (Reuters) - Japan's foreign minister signaled on Sunday there could be no immediate thaw in relations with China, saying Tokyo saw Beijing's defense build-up as a threat given its lack of transparency in military affairs.

The remarks are likely to anger China just days after President Hu Jintao said he was willing to meet Japanese Prime Minister Junichiro Koizumi provided Koizumi stopped visiting a war shrine Beijing considers a symbol of Tokyo's past militarism.

Ties have slumped to their lowest point in decades, strained by numerous disputes including the issue of Koizumi's visits to the Yasukuni shrine and a row over undersea energy resources.

Foreign Minister Taro Aso reiterated Tokyo's concern over the fast-rising Chinese defense budget, up another 14.7 percent this year.

"The real problem is a lack of transparency -- we don't really know what it's being used for," Aso told a political talk show on Fuji Television.

"That gives nearby countries a sense of threat."

The Japanese government's official line is that China poses no threat, but a report issued last week by a think tank linked to the Defense Ministry termed Beijing's growing military strength a "major destabilizing factor" in East Asia.

Aso said the Yasukuni issue should not be a barrier to a Japan-China leaders' summit, a stance endorsed on the same show by top government spokesman Shinzo Abe.

Hu said on Friday that Koizumi's visits to the shrine, where convicted war criminals are honored along with Japan's millions of war dead, stood in the way of improved ties.

"The door is always open for talks, but to build more future-oriented and stable ties, I think that China needs to take a step forward now," Abe said.

"It is especially because we are having problems that we should meet," he added.

Koizumi's term in office ends in September, and attention is shifting to the question of whether his successor will continue his annual visits to the shrine. The prime minister insists he visits Yasukuni to pray for peace.

Both Abe and Aso, key contenders for the premiership, dodged the question of whether they would visit the shrine should they become prime minister, echoing Koizumi by saying it was only natural to want to pay respects to those who had given their lives for the nation.

Asked whether his own feelings or the needs of the nation would take priority, Aso said: "I'm a lawmaker, so of course the needs of the country come first."

Abe, who has supported Koizumi's visits to Yasukuni, warned on a different television channel the issue should not become a focal point for debate on choosing the next prime minister.

"To talk about Yasukuni causes diplomatic problems and that is a loss for national interests," he told the NHK talk show. "It is better to avoid causing political and diplomatic problems."

On Friday, President Hu met a Japan-China friendship delegation led by former Prime Minister Ryutaro Hashimoto who were visiting Beijing in hopes of improving ties.

Apart from Yasukuni, relations are frayed by disputes over ownership of energy resources and islands in the East China Sea.

(Additional reporting by Linda Sieg)