Japan unveiled a sweeping update of its national defence polices on Friday, aiming for greater flexibility and refocusing its capabilities as it confronts China's military buildup and North Korea's nuclear ambitions, according to Reuters. The National Defence Programme Guideline approved by Prime Minister Naoto Kan's cabinet stopped short of easing a ban on arms exports -- a move opposed by a small pacifist party whose help Kan wants to pass bills in a divided parliament -- but it left the door open to international joint development. Under the programme, Japan will allocate 23.49 trillion yen ($280 billion) for defence spending for the five years from next April, down 3 percent from a five-year spending cap to March 2010 due to constraints imposed by a public debt twice the size of gross domestic product. The plan will bolster Japan's defence posture to its southwest, where it shares a maritime border with China, by boosting the number of combat aircraft on the southern island of Okinawa and stationing troops on smaller islands. The policy update is the first major revision in six years and the first under Kan's Democratic Party, which swept to power last year for the first time. "I think we have been able to put forth a defence policy that is appropriate for the tough security environment and the new era," Defence Minister Toshimi Kitazawa told a news conference. Japan's military, which is bigger than Britain's, has for years been pushing the limits of a post-World War Two pacifist constitution. But any sign Japan is further flexing its military muscle could upset Asian neighbours including China, where bitter memories of Japan's wartime aggression run deep. The report, reflecting Japanese anxiety about its giant neighbour, pointed to China's rising military spending and growing maritime activities. "These movements, coupled with the lack of transparency in its military and security matters, have become a matter of concern for the region and the international community," the government said in the report. It also dubbed North Korea's nuclear and missile programmes "a present and grave destabilising factor to the security of our country and the region". Sino-Japanese relations deteriorated sharply in September, when Japan detained a Chinese skipper whose trawler collided with Japanese patrol boats near a chain of disputed islands. SHIFTING RESOURCES The defence guideline also urged efforts to build better two-way ties while encouraging China to act as a responsible member of international society. China responded by focusing on the positive aspects of its growth into a major power. "We do not wish to constitute a threat to anyone," Foreign Ministry spokeswoman Jiang Yu said in a statement on the ministry website. "The fact is that China's development since its reform and opening up has brought huge opportunities for shared prosperity to all countries in the world, including Japan. "Certain countries have no right to cast themselves as representing the international community, engaging in irresponsible naysaying about China's development." In a bid to boost overall Japanese defence capability despite budget constraints, the plan outlines a shift in resources from the army to the air force and navy. Japan's defence capability has traditionally been focused on the north with a large fleet of tanks, a legacy of the Cold War era, when they were deployed to respond to potential threats from the former Soviet Union. Under the new guideline, which covers the next 10 years, the number of tanks will be cut by a third to 400 and the official head count of the army will be cut by 1,000 to 154,000, although the actual headcount is already below the official figure. In contrast, Japan plans to raise the number of submarines to 22 from 16 by commissioning new vessels and keeping existing ones operational longer, while boosting the number of warships fitted with the Aegis ballistic missile defence system to six from four. A study will be conducted to address whether to relax a decades-old ban on arms exports. "It is becoming mainstream among developed countries to boost the capability of defence equipment and cut costs by taking part in international joint development and production," the government said in the guideline. "We will consider measures to respond to this major trend." The self-imposed prohibition is an almost blanket ban on arms exports and on the development and production of weapons with countries other than the United States, making it difficult for defence contractors such as Mitsubishi Heavy Industries to reduce costs and keep up with cutting-edge arms technologies. Besides the strategic shift in military resources, Japan also aims to boost its defence capability through closer ties with key security ally the United States while seeking to fortify cooperation with regional partners such as South Korea, Australia, India and the Association of South East Asian Nations. "The Japan-U.S. alliance will remain indispensable to secure the peace and safety of our country," it said. It added, though, that it was necessary to reduce the burden on communities hosting U.S. forces, whose residents often associate the bases with accidents, crime and pollution. U.S.-Japan ties frayed after the Democrats took office last year and then-Prime Minister Yukio Hatoyama sought to keep a pledge to move a U.S. Marines air base off Okinawa, host to about half of the nearly 50,000 U.S. forces in Japan. Japan and the United States agreed in May to stick to a 2006 deal to move the base to a less populous area on the island, but the plan is facing stiff opposition from residents.