Japan and South Korea Expand Defense Spend, Countering Chinese Air Aggression and Russian Ties

Aggressive air maneuvers by Chinese warplanes near Taiwan have punctuated the PLA’s largest ever military exercises in the Pacific Ocean. China’s air forces have penetrated Taiwan’s ADIZ hundreds of times over the past several years, putting pressure on many regions in East Asia to begin ramping up military spending. Stronger ties between Russia and China, as well as North Korea, have compounded concerns that China may prepare formal action to enforce their territorial claims in Taiwan and the South China Sea.

As a result, South Korea and Japan have dedicated particular attention to their armed forces recently, as well as their domestic defense industries. Due to its output of self-propelled howitzer artillery weapons, South Korea is rapidly expanding the volume of its arms deals with western nations. Japan has struggled to achieve such success with its own equipment, as bans on the export of their weaponry had been in place until 2014. Japan has recently laid out plans to set up a joint operational HQ to better manage its military branches and will soon enlarge its military drills with US forces.

Related ETF: SPDR S&P Aerospace & Defense ETF (XAR)

Marking a recent spike in aggressive activity in the vicinity of Taiwan, as many as 103 Chinese military aircraft had reportedly moved in the direction of the island within a 24-hour period between 6:00am on Sunday and 6:00am on Monday. All of the warplanes veered off as they approached the island and ultimately did not violate Taiwanese airspace, but 40 of the planes either crossed the symbolic halfway point between mainland China and Taiwan or entered the latter’s Air Defense Identification Zone (ADIZ). MRP has highlighted intrusive and increasingly frequent maneuvers of the Chinese air force near Taiwan for several years now, with hundreds of these instances representing incursions into the ADIZ.

This most recent incident was described by Taiwan’s Defense Ministry as a “recent” high in warplanes flying toward the island. It has also coincided with the People’s Liberation Army’s (PLA) largest ever set of exercises in the Pacific Ocean. The Financial Times notes that a Chinese aircraft carrier, the Shandong, last week joined 20 other warships in waters of the Philippine Sea between the islands of the Philippines, Taiwan, and Guam. Following several days of drills, the Shandong and several other ships sailed west into the South China Sea (also referred to as the West Philippine Sea). Along with the…