Japan to scrap 1% GDP cap on defense spending: Minister Kishi

Nikkei -- May 20
TOKYO -- Japan plans to boost defense spending without worrying about sticking to its long-standing limit of 1% of gross domestic product, Defense Minister Nobuo Kishi told Nikkei on Wednesday.

The country looks to beef up its defenses around the Senkaku Islands amid repeated incursions by China's now quasi-military coast guard, as well as address the emerging areas of space and cyber defense.

"We must increase our defense capabilities at a radically different pace than in the past," Kishi said.

"We will properly allocate the funding we need to protect our nation" without worrying about comparing it to GDP, he said.

The decision comes a month after Japan pledged to "bolster its own national defense capabilities to further strengthen the alliance and regional security" in a joint statement with the U.S. after their April summit.

The document was the first joint leaders' statement by the two countries to mention Taiwan in 52 years, stressing "the importance of peace and stability across the Taiwan Strait."

Taiwan sits just 170 km from the Japan-administered Senkakus, which are claimed by China as the Diaoyu, and a Taiwan Strait conflict could engulf the island chain.

Since the 1990s, the only year that Japan's defense spending exceeded 1% of GDP was fiscal 2010, when GDP plummeted after the global financial crisis. The country's defense budget has grown for nine straight years through fiscal 2021 but has remained below 1% of GDP.

That could change in fiscal 2021 if GDP drops again amid the coronavirus pandemic. Spending for fiscal 2020 came to 0.997% of fiscal 2020 GDP based on preliminary data announced Tuesday, and the budget for fiscal 2021 rose 0.5% to 5.34 trillion yen.

Intentionally crossing the 1% line would mark a turning point for Japan's security policy, and is likely to draw pushback from China.

- Nikkei