Japan Says Defence Spending Can Drive Economic Growth Amid Military Expansion

Japan’s government has argued that increased defence spending can boost economic growth, presenting military investment as both a national security priority and a driver of technological innovation in its latest defence white paper.

The annual report highlights growing security concerns posed by China, Russia and North Korea while calling for Japan to strengthen its defence industry by investing in technology, supporting startups and incorporating more commercial components into weapons production.

According to a presentation by Japan’s Defence Ministry, the white paper emphasises that investment in defence can generate broader economic benefits and improve people’s lives.

The position aligns with Prime Minister Sanae Takaichi’s economic strategy, which promotes targeted government spending to stimulate growth while strengthening the country’s security capabilities.

New image for defence

Reflecting the government’s messaging, this year’s white paper features an anime-style cover showing a smiling family in a modern city rather than the traditional military imagery of soldiers and weapons used in previous editions.

A Defence Ministry official said the design was intended to project a futuristic vision of Japan’s defence policy.

Focus on regional security

The report identifies China’s military activities as Japan’s greatest strategic challenge, warning that developments in the region continue to raise serious security concerns.

“China’s military activities and other actions are a matter of serious concern to Japan and the international community, and represent Japan’s greatest strategic challenge,” the white paper stated.

Military analysts expect Japan’s upcoming national security strategy to recommend further increases in defence spending, largely aimed at strengthening deterrence against a possible conflict involving Taiwan.

Relations between Tokyo and Beijing became more strained after Prime Minister Takaichi stated in November that Japan could deploy its Self-Defense Forces if a Chinese attack on Taiwan threatened Japan’s own security.

China strongly condemned the remarks and demanded they be withdrawn.

Balancing defence and public finances

Japan has already increased defence spending to 2 per cent of its Gross Domestic Product (GDP) through a combination of tax measures, spending reforms and one-off revenues, marking the country’s largest military expansion since the end of the Second World War.

However, questions remain over how the government would finance additional spending without placing further strain on public finances.

The administration recently approved a record 122.3 trillion yen national budget for the fiscal year ending March 2027 and later introduced an additional 3.1 trillion yen supplementary package to cushion households and businesses against rising energy costs.

Investment in advanced weapons

Much of Japan’s recent defence spending has been directed towards acquiring long-range missiles capable of striking targets more than 1,000 kilometres away.

Future investments are expected to focus increasingly on drones and other unmanned military systems, reflecting lessons drawn from the ongoing war in Ukraine.