Depth | Will Japan's defense budget hit a new high in the new fiscal year? Is it "dedicated to defense" or "dedicated to war"? Japanese Defense Budget | 2024 Financial Year | Japanese Media Reveals

Recently, Japan's move to advance its security strategy has been dazzling. Following the release of the Defense White Paper and joint air force exercises with Italy, Japanese media revealed on the 8th that the Japanese Ministry of Defense plans to apply for a defense budget for the 2024 fiscal year, exceeding 7 trillion yen, setting a new historical high.

Analysis suggests that Japan's move aims to implement the direction established in last year's security policy document, provide more financial support for "turning defense into attack", and have a clear intention to respond to China. Japan's pursuit of breakthrough military development has caused strong concern in the international community, and even Japanese citizens question whether their country is "dedicated to defense" or "dedicated to war"?

Paid the down payment, benchmarking against NATO

According to sources cited by Kyodo News on the 8th, the Ministry of Defense is coordinating the 2024 fiscal year budget application compiled at the end of August, with plans to propose defense expenses exceeding 7 trillion yen. If the application is accepted, the scale of defense spending in the next fiscal year starting from April 2024 will exceed 6.8 trillion yen in the 2023 fiscal year.

What is the concept of a defense budget exceeding 7 trillion yen? Let's look at it from both vertical and horizontal dimensions.

From a vertical perspective of Japanese history, from the end of World War II to 1961, Japan experienced post-war economic recovery, and the proportion of defense expenditure to GDP decreased from 2.2% to less than 1%. For a long period of time thereafter, this proportion never exceeded the 1% "tight band".

But starting from this century, Japan has sought to break free from military constraints and even change the nature of its self-defense forces through constitutional amendments. As a result, Japan's defense spending has also skyrocketed. The total defense budget for the five-year period from 2019 to 2023 is 27.5 trillion yen, which is 2 trillion yen higher than the previous five-year period. The 1% tight band was also broken for the first time in 2020, and there is still a potential for further escalation in the future.

According to three new security policy documents passed by Japan last year, the Kishida government plans to increase the total defense spending to approximately 43 trillion yen in the fiscal year 2023-2027. This number will increase by 56% compared to the previous five years. Japan hopes to increase its defense spending to 2% of GDP in the next five years, aligning with NATO standards.

Analyze from a horizontal perspective of military spending in various countries around the world. Although at first glance it may seem that Japan's defense spending as a percentage of GDP is not high, ranking behind many countries, Japan's total GDP is quite large. By doing so, Japan's defense budget can rank sixth globally. If defense spending expands as planned in the next five years, it will elevate Japan's ranking to third in the world.

"In order to achieve this goal, Japan has already provided a strong down payment in the 2023 fiscal year." Foreign Policy magazine pointed out that the defense spending of 6.8 trillion yen is 26% higher than the previous fiscal year, setting a historical record. Now, defense spending in the fiscal year 2024 is expected to go further on this basis.

Where does the "inflation" of expenses point to?

Why has Japan's defense spending and budget skyrocketed? Where will this money be used again?

Lu Yaodong, a researcher at the Japan Research Institute of the Chinese Academy of Social Sciences, pointed out that increasing defense budgets is to achieve the direction established in Japan's three security policy documents. Last year, the Kishida government included content such as "the ability to attack enemy bases" in the document, allowing the Japanese Self Defense Force to "take the initiative". This means that Japan negates the post-war "defensive defense" principle and "turns defense into attack". This requires more defense budget to strengthen attack capabilities.

Lv Yaodong said that in fact, Japan's defense spending has been on the rise for over a decade, and it was only during the "Kishida era" that the goal of defense spending accounting for 2% of GDP was explicitly proposed. The Kishida government's excuse for the sharp increase in military spending is that the Ukrainian crisis, the rise of China's military power, and North Korea's nuclear missile program will threaten its own security. However, in fact, Japan has always had the intention to break through the "exclusive defense" system and seek "national normalization", while the United States has also considered using Japan's hand to engage in great power competition.

Wu Jinan, Honorary President of the Shanghai Society of Japan and Senior Researcher at the Shanghai Institute of International Studies, said that Japan's defense spending has rapidly "expanded" due to the need for money in many areas of "turning from defense to attack.".

Firstly, the cost of purchasing long-range missiles. Japan hopes to strengthen its ability to attack enemy bases through it. According to the 2023 fiscal year budget, the cost of purchasing the US made Tomahawk cruise missile is 211.3 billion yen. This will still be a major "burning money" project for military procurement in the 2024 fiscal year.

Secondly, there is the cost of performance improvement for the Japanese Ground Self Defense Force's Type 12 land-based anti-ship missile. The Japanese side hopes to upgrade land-based missiles with a range of about 300 kilometers to multi-purpose medium range missiles with a range of 1000 kilometers that can be launched on land, sea, and air platforms. This is called "upgrade", which is actually "redevelopment" and will cost a lot of money.

Japan also intends to increase investment in military development such as drones and hypersonic gliders. In addition, improving the treatment of the Self Defense Force and closing some projects will also squeeze out some expenses.

Wu Jinan believes that Japan's increase in defense spending has a very clear direction. "The defense budget indicates that the Southwest Islands are the focus of military deployment. Japan intends to build additional ammunition depots and expand combat forces in the southwest direction, which is clearly a preparation for dealing with China."

Contradictions yet to be resolved, constraints still exist

What are the prospects for implementing Japan's massive and expensive defense budget expansion plan?

Two analysts believe that there are still some constraints - first, where does the money come from, and secondly, there are still some contradictions that need to be resolved.

Let's take a look at the first point first. Wu Jinan believes that there are four financial sources for Japan to increase defense spending. The first is the funds transferred from budget expenditure reform, which means "robbing Peter to pay Paul". Second, the surplus that was not consumed in the last fiscal year was used to repay treasury bond. The third is the proceeds from the sale of some state-owned assets, such as the sale of government shares in some large companies, including NTT Dokomo. The fourth is to rely on the increase in tax rates such as corporate tax, income tax, and cigarette tax to make up for the shortfall in income.

Wu Jinan said that a new situation at present is that due to the good situation of Japanese enterprises in recent years, especially after the significant depreciation of the yen, the return on overseas investment has expanded significantly when converted into yen, which has increased government tax revenue. This allows the Kishida government to temporarily avoid touching controversial tax issues. However, even if we avoid this "political landmine", there are still many difficulties in fundraising.

Looking at the second point again. Wu Jinan pointed out that in recent years, Japan has imported a large amount of weapons from the United States based on paid military assistance from the US government. However, because the price and delivery date are decided by the United States, the FMS contract amount has doubled. Japan's defense industry often fails to secure orders, or has orders but is unable to eat enough, resulting in many companies having no choice but to withdraw from defense equipment production. Therefore, in terms of defense spending, how to balance the interests of the US and Japan's domestic defense industry is a problem for the Kishida government.

Jennifer Lind, Associate Professor of Political Science at Dartmouth College in the United States, believes that there are doubts from the outside world about whether Japan can adhere to its military expansion path. "How much will Tokyo actually spend, especially considering all the public policy challenges that the Japanese people are very concerned about?" In addition, as the birth rate in Japan decreases, the recruitment of the Self Defense Forces is facing a more severe situation.

Blindly following the United States and intensifying tension

In recent times, Japan has made frequent moves to advance its security strategy.The 2023 edition of Japan's Defense White Paper further positions China as Japan's "unprecedented greatest strategic challenge"

Wu Jinan and Lv Yaodong pointed out that Japan's portrayal of the "China threat" and strong cooperation with the United States' "Indo Pacific strategy" are not conducive to its own development and regional and global peace and stability.

From Japan's own perspective, it has already borne a heavy burden of government debt, and the surge in defense budget indicates that the budget deficit will double in 2025. The high defense budget will also squeeze out various financial expenditures such as healthcare and childcare, directly affecting the lives of the people.

Many Japanese people have pointed out that the current trend of the Japanese government is clearly to transform the "self-defense forces" that specialize in defense into "armies set up for war", which is unacceptable. Honorary Professor Kazuoka Takashi of Yamaguchi University in Japan stated that Japan has a serious problem of aging and having fewer children, and a significant increase in military spending will only exacerbate poverty. Japan's path towards "new militarism" is akin to poverty.

From a regional and global perspective, peace, development, and cooperation are the main themes of East Asia and the common goals pursued by people around the world. Japan's pursuit of breakthrough military development and acting as a vanguard in the confrontation between factions may exacerbate the regional arms race and make the regional situation more tense.

"Nowadays, in East Asia, Japan not only exerts influence on regional security through its alliance with the United States," Lu Yaodong said. "Japan is also deepening its relations with NATO countries with the support of the United States: whether it is the Foreign Minister Defense Minister Mechanism, material and labor exchange agreements, reciprocal access agreements, or the Four Party Mechanism, fighter joint development, etc., all of these actions will bring profound and complex changes to the security situation in East Asia."