A Defense Agency research institute report released Thursday calls for consultations between the United States and China over the proposed deployment of a U.S. national missile defense system, warning that it may prompt China to increase its intercontinental ballistic missile capability.

The East Asian Strategic Review 2001, published by the National Institute for Defense Studies, devotes a chapter to the controversial plan for a missile shield.

The annual report by agency researchers says that even limited NMD deployment would have a major impact and would prompt China to increase the number or ability of its ICBMs.

Anticipated negative impacts on the European region caused by the missile shield proposal can be mostly avoided if the U.S. and Russia reach agreements concerning what to do with the 1972 Anti-Ballistic Missile treaty, it says, adding that Russia does not have an option to compete with the U.S. by enhancing its missile capability.

Japan and the U.S. have been conducting joint research on a theater missile defense system to cover Japan and its vicinity.

The Japanese government will have to make political decisions when the TMD project moves on to the development and deployment phases.

The report also says that under the new U.S. administration of President George W. Bush, balancing U.S. desires for a greater Japanese role in the bilateral defense alliance and domestic constraints over Japan's involvement in international security will become more important than ever.

The 252-page report looks at recent trends concerning security matters in China, Russia, the Korean peninsula, Southeast Asia and U.S. policy in the Asia-Pacific region.