Recently, Japanese Prime Minister Sanae Takaichi visited the United States. This diplomatic show, marked by eager alignment with Washington, has drawn widespread criticism in Japan.

Insightful voices in Japan pointed out that the Takaichi administration has disregarded economic and public well-being concerns, persistently pushing for constitutional revision, increased defense spending, and expanded arms exports, while “currying favor with the United States” in the name of so-called “strengthened deterrence.” This, they argue, is “a completely misguided path.”

Hyping up external geopolitical risks to mask domestic economic difficulties is nothing more than a political smokescreen, further exposing the government’s lack of effective macroeconomic governance.

Since taking office, Takaichi has pursued an aggressive policy line under the banner of “Sanaenomics[1.1]Takaichi economics,” advocating what is termed a “responsible proactive fiscal policy,” while placing undue faith in large-scale fiscal spending and ultra-loose monetary policy.

The administration seeks to reverse economic decline through the so-called “trickle-down effect” of large corporations.

However, this short-term approach faces structural headwinds: a shrinking and aging population leading to persistent labor shortages and a continuously eroding tax base. The resulting surge in government borrowing has pushed Japan’s public debt-to-GDP ratio beyond 260%, widely considered a high-risk threshold.

Such short-sighted practices — borrowing from the future to pay for the present — have pushed Japan’s government debt-to-GDP ratio beyond the high-risk threshold of 260 percent.

Mainstream Japanese media have voiced strong concern, criticizing Takaichi as “highly irresponsible.” Haruhiko Kuroda, former governor of the Bank of Japan[2.1], has warned that continuing loose fiscal and monetary policies amidst current inflation and yen depreciation would worsen inflationary pressures. Under current conditions of inflation and yen depreciation, continued loose fiscal and monetary policies would further aggravate inflationary pressures.

Meanwhile, influenced by geopolitical tensions and developments in the Middle East, Japan is facing the dual pressures of an “oil premium” and a weakening yen, with impacts rapidly spreading from the energy sector to broader aspects of daily life. Compounding these issues, geopolitical tensions and developments in the Middle East are exerting a “double squeeze” on Japan through an “oil premium” and a weakening yen. The economic impact is rapidly spreading from the energy sector to broader aspects of daily life.

Japan’s economic recovery has already been difficult, yet Takaichi insists on pursuing a militaristic and risky course, further increasing the burden on the Japanese people. The administration’s push for constitutional revision, military expansion, and deregulation of defense policies is not only a geopolitical gamble but also a dangerous economic strategy aimed at reviving militarism and returning to the outdated path of stimulating growth through military demand.

Japan’s fragile economic recovery faces additional strain as Takaichi pursues militarization policies, increasing public burdens. Constitutional revision, military expansion, and relaxed defense export restrictions represent both geopolitical gambles and economically hazardous attempts to revive growth through military demand — an outdated model.

The right-wing forces represented by Takaichi are creating a climate of confrontation to justify substantial increases in defense spending, using security anxieties to legitimize shifts in industrial policy, and attempting to channel resources into key sectors under the pretext of “defense.”

Long-standing ties of interest between Japan’s military-industrial enterprises, defense industry, and government institutions have facilitated the directed allocation of massive defense orders to major domestic conglomerates.

In 2023 alone, Mitsubishi Heavy Industries secured contracts worth as much as 1.68 trillion yen from the Japanese government. Retired senior officials from Japan’s Ministry of Defense frequently take up positions as special advisors or directors at companies such as Mitsubishi Heavy Industries and Kawasaki Heavy Industries, leveraging their knowledge of internal procurement rules to help firms win lucrative projects.

Since assuming office, Takaichi has advanced the target of raising defense spending to 2 percent of GDP to fiscal year 2025. In the budget for fiscal year 2026 approved at the end of 2025, Japan’s defense spending exceeded 9 trillion yen, marking the 14th consecutive annual increase. Continuous expansion of the defense budget has further entrenched the alignment of interests between the bureaucratic system and the defense industry.

The Takaichi administration also plans to relax restrictions on arms exports in an attempt to profit from overseas sales. For a long time, constrained by Japan’s pacifist constitution, large enterprises could rely only on domestic defense orders. To this end, the administration is actively seeking to lift restrictions on the export of lethal weapons and to fully liberalize defense equipment exports, aiming to turn the military-industrial sector into a “cash cow” for the Japanese economy and break through postwar institutional constraints.

Once such exports are fully opened, Japan’s defense industry would become more expansionary, creating conditions for further right-wing pushes toward constitutional revision and potential involvement in international conflicts.

Japan’s economic recovery requires structural reform. However, to avoid the political costs associated with such reforms, the Takaichi administration has shifted its policy focus toward defense and economic security, simplifying structural reform into “crisis management investment” in sectors such as defense, in an attempt to generate short-term public support and economic stimulus.

During the U.S. visit, the administration expedited domestic budget approval. Despite record spending levels, parliamentary deliberation time was this century’s shortest, prompting criticism of Takaichi’s rushed tactics.

In conjunction with this US visit, the administration pushed forward budget deliberations domestically. Despite reaching record highs in both total expenditure and defense spending, the time allocated for deliberation in the House of Representatives was the shortest in this century. Japanese media outlets have criticized Takaichi for going all in, forcing the ruling party to push the budget through the lower house.

While these measures may create a “defense bubble” in the short term, they essentially bind Japan’s economy ever more tightly to the chariot of “neo- militarism,” with the ultimate costs borne by the Japanese people.

In response to Japan’s procurement of US military equipment totaling 3.55 trillion yen in recent years, the Tokyo Shimbun questioned: “Why does Japan continue to spend large amounts of taxpayers’ hard-earned money on purchasing US weapons? Should this ‘bulk buying’ continue?”

To finance the ever-expanding defense budget, the Japanese government plans to introduce defense-related tax increases involving tobacco taxes, corporate taxes, and individual personal income taxes, directly adding to the burden on businesses and households.

The militaristic adventurism pursued by the Takaichi administration is by no means a remedy for Japan’s economic challenges, but rather a toxic prescription that risks accelerating systemic decline. This political gamble — —seeking to mask governance failures through military procurement and fervent fiscal expansion — —is destined to fail in addressing deeply rooted structural problems.

Repeating the mistakes of militarism and attempting to drive growth through the incitement of confrontation will ultimately lead Japan down a dangerous path.

(Zhong Sheng is a pen name often used by People’s Daily to express its views on foreign policy and international affairs.)
 

By Zhong Sheng

Source: People’s Daily