As AMTI readers know well, tensions between Japan and China over the Senkaku Islands have been running high since 2010. Despite a partial thaw when Prime Minister Shinzo Abe met with President Xi Jinping last December, Beijing continues to put steady pressure on Tokyo’s control of the islands with regular maritime and aerial incursions and double-digit growth in defense spending.  Yet Tokyo’s defense spending has remained low, consistent with historical trends.  Japan’s defense budget topline has not changed much in recent years and is unlikely to be overhauled in the near future. Nonetheless, Tokyo’s spending clearly reveals a newfound focus on so-called “grey zone” contingencies like the Senkakus.

Since the 1970s Japan has maintained defense spending at or below approximately one percent of GDP. As a percentage of total government spending, defense comprises only 2.5 percent. Despite the recent regional challenges posed by China’s military modernization and North Korea’s nuclear weapons and missile development, these historic limits on Japanese defense spending have remained firmly in place. Between 2003 and 2012, Japanese defense spending actually declined, but rose again in FY 2013, 2014, and 2015. For the last three years it has stood at approximately 4.8 trillion yen annually. Released in December 2013 alongside its most recent National Defense Program Guidelines, Tokyo’s Mid-Term Defense Program established a defense expenditure limit of JPY 23.97 trillion (205.1 billion USD) for the 2014-2018 period. This spending cap means that Tokyo cannot continue to increase its annual budget as it has done the last three years, or the cap itself will need to be raised. Within these stringent limits, however, Tokyo’s defense priorities indicate that it is increasingly focused on the defense of the Senkakus.

Japan’s 2013 National Defense Program Guidelines emphasize Tokyo’s concern over so-called “grey zone” contingencies—situations that lie somewhere between peace and full-scale war and include conflicts over sovereignty, territory, and maritime interests. Japan’s procurement patterns demonstrate that grey zone island defense has quickly become a security priority, and Tokyo is prioritizing naval and air systems and personnel. In the last ten years and since 2010 in particular, the Japanese Maritime Self-Defense Force (JMSDF) and Air Self-Defense Forces (JASDF) budgets have increased modestly, while the Ground Self-Defense Force (JGSDF) budget has decreased slightly.

SDF Branches Chart


Source: Japan Ministry of Defense

More than each service’s overall budget, however, Japanese procurement patterns demonstrate a clear shift towards air and maritime defense.  The FY2015 JASDF budget includes JPY 51.6 billion for five V-22 Osprey tilt-rotor aircraft, which are particularly useful for maritime operations. It included JPY 23.2 billion towards a new E-2D Hawkeye tactical early warning aircraft squadron and JPY15.4 billion for four Northrop Grumman RQ-4s Global Hawk UAVs—both assets for sea and air surveillance. The JASDF budget also included JPY 16.4 billion for a new medium-range coastal air-defense system.

The JMSDF procurement budget underscores the grey zone mission even more clearly. Tokyo allocated JPY 350.4 billion for a bulk order of 20 P-1 maritime patrol aircraft to replace its aging P-3 Orion fleet, and JPY 20.3 billion to purchase 30 AAV-7 amphibious assault craft from the United States. The 2013 NDPG requires Tokyo to maintain a destroyer fleet of 54 vessels, up from 48, and Japan is expanding its Aegis fleet with a new Atago-class destroyer and buying the Aegis system for a second ship for a total of JPY 168 billion. Japan is in the process of increasing its submarine fleet from 16 to 22 vessels and in FY15 will spend JPY 64.3 billion to build its 11th Soryu-class diesel-electric submarine. It is also in the process of developing a new class of helicopter carrier (or helicopter destroyer), the Izumo.

Perhaps most indicative of Tokyo’s priorities are the changes in the Ground Self-Defense Force budget. The overall GSDF budget has been cut modestly in recent years, and ground force personnel numbers have been reduced, while those in other services remain constant.

But the JGSDF is also clearly being reoriented towards a maritime expeditionary mission. The JGSDF budget traditionally included substantial investments in tanks, artillery, and armored vehicles, but the JGSDF has cut hundreds of these systems in just the last several years. Instead, Japan’s ground forces are investing in their own amphibious vehicles. Notably, Tokyo has also stood up a new unit modeled on the U.S. Marines and placed this within the JGSDF. Couple a slightly lower budget with fewer armor and artillery units with this new amphibious capability –as well as recent joint JSDF exercises with the U.S. Marines–it is clear that Japan’s ground forces are also being put to sea.

In the coming months, we can expect Japan to do more to further its island defense mission. Prime Minister Abe is making substantial progress towards reinterpreting Japan’s constitution to allow the exercise of the right of collective self-defense, which will allow for closer operational planning and cooperation with the United States. Tokyo and Washington are also nearly finished revising the Bilateral Defense Guidelines that support the alliance, and these will also place emphasis on grey zone contingencies. Additionally, in April 2014 Tokyo eased its self-imposed ban on arms exports to allow it to transfer defense equipment, and this has resulted in new defense cooperation with Australia, the United Kingdom, France, India, the Philippines, and Vietnam. Despite regional trends, Japan’s historically low defense spending is unlikely to see an uptick in the near future. Nonetheless, we can expect Tokyo to take a more active regional defense role and prioritize the Senkaku mission despite these longstanding constraints.

About Michael Green

Michael Jonathan Green is senior vice president for Asia and Japan Chair at CSIS and an associate professor at the Edmund A. Walsh School of Foreign Service at Georgetown University. He served on the staff of the National Security Council (NSC) from 2001 through 2005, first as director for Asian affairs, and then as special assistant to the president for national security affairs and senior director for Asia.