TOKYO, Dec 10: Japan took another step away from its post-World War II pacifism on Friday by ending its decades-old ban on military exports and telling defence planners to regard China and North Korea as potential threats.

The Chinese government expressed "strong dissatisfaction" with the Japanese report. "Official Japanese documents openly play up the so-called 'China threat', which is completely baseless and irresponsible," foreign ministry spokeswoman Zhang Qiyue said in a statement posted on the ministry's website.

"China expresses strong dissatisfaction with this, and hopes Japan will do more to improve mutual trust and the healthy and stable development of bilateral ties," she said.

The policy change on Friday came in the form of a set of guidelines for defence policymakers, updated for the first time in nine years, along with a five-year outline for military procurements set to begin from April 2005.

The guidelines approved by the cabinet said Japan needed to change its mindset to have "multi-function, flexible defence capabilities" to deal with new threats such as terrorist and missile attacks.

The guidelines said: "China, which has a great impact on security in this region, is pushing ahead with enhancing its nuclear and missile capabilities in modernizing its navy and air force while expanding marine activities."

Tomohide Murai, professor of Japan's state-run National Defence Academy and specialist on East Asia security issues, said Beijing "will surely upgrade and modernize its military" as its economy grows.

"Although China has never said it would attack Japan, we cannot really rule out its offensive intention given the fact that the Chinese nuclear submarine just entered our waters," he said.

The guidelines said North Korea was "developing, deploying and proliferating weapons of mass destruction and ballistic missiles," describing its military moves as serious, destabilizing factors in the region.

An advisory panel to Koizumi mapping out the defence strategies recommended in October that Japan study acquiring the ability to launch pre-emptive strikes. But there was no explicit reference to that point in the new outline. Murai said the government in part likely feared causing concern at home and abroad.

A senior Defence Agency official said the report's authors "decided it is premature." A statement by Chief Cabinet Secretary Hiroyuki Hosoda said Japan decided to export missile parts to the United States under "strict controls" to contribute to "the Japan-US security alliance and secure the safety of our country." -AFP