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China military rise risks instability

Aussie PM says it can create misunderstanding.

CANBERRA, July 5 (Reuters) - China's rapid military expansion risked causing greater instability in the region, Australian Prime Minister John Howard said on Thursday.

"The pace and scope of its military modernisation, particularly the development of new and disruptive capabilities such as the anti-satellite missile, could create misunderstandings and instability in the region," Howard said at the launch of a new defence paper.

Australia, a close U.S. ally, has been dovish about China's military and economic development, with Beijing having overtaken Japan as the country's top trade partner.

But with Washington eyeing Canberra's close relationship with Beijing with some concern, the document launched by Howard brought his government into closer step with Japan and the United States -- both partners with Australia in security pacts.

"Australia has no closer nor more valuable partner in the region than Japan," the document said. "Japan's more active security posture within the U.S. alliance and multinational coalitions is in keeping with its economic and diplomatic weight."

Howard also said Australia's military must prepare for offensive operations far from home.

Howard, who has committed Australia's military to a A$51 billion ($43 billion) build-up including two new amphibious assault carriers, missile destroyers, tanks and strike aircraft, said Canberra had buried the "self-defeating" idea that Australia's military should be based on home defence.

"It needs to be able to defend our mainland and approaches in the unlikely event these ever come under direct military threat. But it must also be capable of conducting substantial operations in our immediate region, whether alone or as the leader of a coalition, and of making meaningful military contributions as a member of coalitions further abroad," Howard said.

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