Japan should start providing its official development assistance to China on a project basis and terminate its habit of multiyear disbursement programs, a report released Monday by a Foreign Ministry advisory panel says.

In a report submitted to Foreign Minister Yohei Kono, the panel, assigned to review ODA policy toward China, it is suggested that the amount of aid the country has been giving Beijing could be reduced in light of severe fiscal conditions.

Japan should flexibly deal with China-bound ODA and "not consider the conventional amount of ODA as a given," the panel said.