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Posted on 04/06/2002 9:33 AM PST by maui_hawaii

TOKYO (Reuters) - The leader of Japan's opposition Liberal Party, Ichiro Ozawa, said on Saturday it would be a simple matter for Japan to produce nuclear weapons and surpass the military might of China if its neighbour got "too inflated".

Inviting a sharp response from Beijing, which is sensitive to any signs of militarism in Japan, Ozawa told a seminar in the southern city of Fukuoka that "China is applying itself to expansion of military power".

"If (China) gets too inflated, Japanese people will get hysterical," Kyodo news agency quoted him as saying.

"It would be so easy for us to produce nuclear warheads. We have plutonium at nuclear power plants in Japan, enough to make several thousand such warheads," he said.

Ozawa said his statements, coming just days before Japanese Prime Minster Junichiro Koizumi visits China, were meant to encourage stronger ties between China and Japan, the only country to have suffered a nuclear attack.

He said he made similar comments recently to a person he described as being affiliated with the Chinese intelligence agency.

"I told that person that if we get serious, we will never be beaten in terms of military power," he said.

Ozawa said Japan found itself in a difficult position.

"Northeastern Asia, in which both China and North Korea (news - web sites) are located, is the most unstable region in the world," he said.

"China is applying itself to expansion of military power in the hope of becoming a superpower...following the United States."

Koizumi will visit China for three days from April 11 to attend an economic conference on Hainan island, although he is also expected to meet Chinese Premier Zhu Rongji.

Li Peng, chairman of China's parliament, who is on a visit to Japan, said in an interview published in a regional newspaper on Saturday he was optimistic about Japan-China relations.

Li said Japan and China, long resentful over its treatment at the hands of Japanese invaders, may encounter difficulties on the path to closer ties because the countries were so different.

"Even in such cases, the two nations can solve any problems with effort and foresight," Li said in an interview with the Kitanippon Press, a newspaper in western Japan.

Li's visit is one of several high-level exchanges between China and Japan to mark the 30th anniversary of the establishment of diplomatic ties in September 1972.

Ties have been strained in recent times by Koizumi's visit last year to a shrine honouring Japan's war dead, including convicted war criminals, and Japan's approval of a history textbook that China and other Asian countries say downplays Japan's wartime aggression.