Japan eyes defence budget hike to fortify island chain facing China

By Tim Kelly

TOKYO, Aug 31 (Reuters) - Japan's Ministry of Defense is seeking a fourth straight annual military budget hike to help fortify the country's far-flung island chain in the East China Sea, close to ocean territory claimed by Beijing.

In a document submitted to the government on Monday, the ministry asked for a 2.2 percent increase in military spending to 5.09 trillion yen ($42.38 billion) for the year starting in April. If approved, the new defence budget would be Japan's biggest in 14 years.

China's military budget for this year rose 10.1 percent to 886.9 billion yuan ($138.37 billion), the second largest in the world after the United States.

Japan's Defense Ministry will buy AAV7 amphibious assault vehicles made by BAE Systems (LSE: BA.L - news) , F-35 Stealth warplanes made by Lockheed Martin Corp and Osprey tilt-rotor transport aircraft from Boeing Co (NYSE: BA - news) under the budget plan, said the document.

Other purchases would include Global Hawk drones made by Northrop Grumman Corp, mobile missile batteries, helicopters and other kit the military wants to defend island-dotted ocean territory stretching 1,400 km (870 miles) from the Japanese mainland almost to Taiwan.

Money would also be allocated to building and extending military bases along the island chain, the document added.

As China's military power grows, Japan is shifting from defending its northern borders from a diminished Russian threat with tanks and heavy armour to deploying a lighter, more mobile force in the East China Sea and the Western Pacific

By bolstering its military presence on islands with radar stations, troop bases or missile batteries Japan could gain a tactical advantage over China, which with far fewer islands under its control in the region would have to rely more on naval vessels or ocean platforms.

Japan and China contest ownership of uninhabited islands in the East China Sea called the Senkaku by Tokyo and the Diaoyu by Beijing. Japan administers the chain.

Only 150 km (94 miles) south of the outcrops, Japan is building a military radar station on Yonaguni island, home to 1,500 people.

In the budget request, defence officials have allocated $90 million to expand an army base on Miyakojima island, 300 km (188 miles) east of Yonaguni and $72 million for base construction on Amami Oshima, an island halfway between the main Okinawan island, home to the largest contingent of U.S (Other OTC: UBGXF - news) . Marines in Asia, and the Japanese mainland.

The Osprey troop carrying aircraft, amphibious assault vehicles and new maneuverable armoured fighting vehicles on Tokyo's shopping list will bolster a force including Japan's first detachment of marines since World War Two. ($1 = 120.0900 yen) ($1 = 6.4095 Chinese yuan renminbi) (Reporting by Tim Kelly; Editing by Dean Yates)