The assessment was made by the National Institute for Defense Studies, which is a research wing of Japan's Defense Agency but does not speak for the government.

"The outlook of the military balance between Taiwan and China has become increasingly uncertain," an institute official said, quoting from the annual East Asian Strategic Review.

"China has continued to modernize its military while Taiwan has not been able to procure arms or weapons due to political obstacles," it said.

The study frets about European Union plans to lift its arms sales embargo on China, which was imposed in 1989 after the bloody crackdown on pro-democracy protests in Beijing.

Japanese Prime Minister Junichiro Koizumi disagreed openly Sunday at a news conference with visiting French President Jacques Chirac, a prime proponent of lifting the ban who had argued that the EU would not ship sensitive technology.

Another Japanese researcher involved in the defense report said Tokyo did not believe that the Europeans had made "adequate justification" for lifting the embargo.

"We don't believe the lifting of the arms embargo would mean the latest European weapons will be shipped to China immediately. But the lifting would probably lead to various military technologies going to China in ways that we would not be able to detect," said the researcher, speaking on condition of anonymity.

He speculated that the lifting of the embargo could make the Europeans a commercial competitor in the Chinese military market to Russia, which exports weapons to Beijing and could begin offering hardware that is more advanced or at better prices.

"It would be OK if the ban is lifted while transparency (of any weapons sales) is ensured. The security environment of Europe and East Asia are different," he said.

"This region is not as stable as Europe. We want to bring that message to them," he said.

Another researcher with the institute said Europe might be trying to draw closer to China to become a counterforce to the world's sole superpower.

"One can argue that Europe is teaming up with China to keep the United States in check," he said.

"The rise of China has changed the security environment of East Asia," he added.

Japan and the United States are close allies and have pledged to work together to show their opposition to the lifting of the EU embargo. More than 40,000 US troops are based in Japan, most of them in Okinawa near Taiwan.

Chirac has said he expected an agreement to lift the ban by the end of June, despite signs the 25-member EU bloc could delay its decision after China on March 14 gave its army legal power to invade Taiwan if the island secedes.

Advocates for ending the embargo say they can still influence China on regional stability and human rights without the ban.

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