After a period of warming relations between the two Asian powers last year, ties have cooled in recent months amid international souring of sentiment on China over the virus and Beijing's imposition of a national security law on Hong Kong.

The closely watched paper on Japan's defense policy accused China of "propaganda efforts... including the spread of disinformation" over the virus, which first broke out in the Chinese city of Wuhan.

A Japanese defense official presenting the report cited as examples comments made on Twitter by China's foreign ministry that US forces may have brought the virus to Wuhan, as well as claims that Chinese herbal medicines can treat the disease.

China has "relentlessly continued its unilateral attempts to change the status quo by coercion in the sea around the Senkaku islands", the review says, referring to disputed islets the Chinese call the Diaoyu.

This is a "grave matter of concern", Japan said, adding that Beijing "has sustained a high-level defense budget without transparency over more than 30 years".

The United States has ramped up pressure on Chinese activities in the South China Sea, with Secretary of State Mike Pompeo branding Beijing's pursuit of resources there illegal.

China hit back on Tuesday, attacking Pompeo's claims as "unjustified".

In general the coronavirus pandemic would divert military resources to domestic crises, but could also lead to greater "strategic competition among countries", the 596-page report suggested.

On North Korea, the report repeated its assessment that the rogue state "has already miniaturized nuclear weapons to fit ballistic missile warheads".