Chinese Defense Minister Cao Gangchuan voiced concern Wednesday over Japan's plans to launch a missile defense system in 2007, according to Japanese officials.

During a meeting with visiting Defense Agency chief Shigeru Ishiba, Cao said this policy could undermine the region's military balance and trigger a new arms race, according to defense agency officials.

The Defense Agency has asked the Finance Ministry for 142.3 billion yen in the fiscal 2004 budget to prepare for the system's launch.