Japan's military may form a new unit to monitor Chinese naval operations, a move to counter what many Japanese strategists see as an increasingly aggressive stance by Beijing in the East China Sea.

The unit would consist of about 200 troops based on remote Yonaguni Island, which is on Japan's western fringe near Taiwan, and would primarily be tasked with radar monitoring of Chinese naval operations in the area, according to a report in the Yomiuri newspaper.

The report quoted unnamed defence ministry officials as saying a budget for the unit would be formally submitted soon. Ministry officials contacted by The Associated Press on Thursday said they could not comment on specifics because the plan was still under discussion. The ministry has confirmed, however, that it is considering bolstering military monitoring capabilities in the country's southwestern islands.

Tokyo is deeply concerned over the growth of the Chinese navy and its posture in the East China Sea, where the two countries have conflicting territorial claims. Relations between Beijing and Tokyo have soured recently because of an incident in which a Chinese trawler collided with two Japanese coast guard patrol ships in waters near disputed islands called the Diaoyu or Diaoyutai in Chinese and Senkaku in Japanese.

The islands are controlled by Japan but also claimed by China. Located 120 miles (190 kilometres) east of Taiwan, the islands are surrounded by rich fishing grounds and are regularly occupied by nationalists from both sides. After the Sept. 7 collision, China demanded an apology and compensation, but Tokyo countered by demanding that Beijing pay for damage to the patrol boats.