Takaichi: Economic security is a key issue

Takaichi: Economic security is a key issue

Takaichi: Economic Security Is a Key Issue

Prime Minister Sanae Takaichi’s administration has positioned economic security as a cornerstone of Japan’s national strategy, integrating it with fiscal policy and industrial development to address both domestic and geopolitical challenges. Following her party’s decisive 2026 Lower House election victory, which secured a 316-seat supermajority for the Liberal Democratic Party (LDP), Takaichi now has the legislative authority to advance a growth agenda emphasizing "responsible yet proactive fiscal policy". This strategy prioritizes crisis-management investments in sectors such as defense, semiconductors, and food security, alongside traditional growth drivers like innovation and infrastructure according to research.

A defining feature of Takaichi’s approach is the explicit linkage between economic resilience and national security. The government has designated defense as a "growth sector," framing military industrial development as both a strategic and economic imperative. Plans to raise defense spending to 2% of GDP by fiscal 2025—two years ahead of previous targets—underscore this shift. Additionally, initiatives like the Rapidus Project aim to bolster Japan’s semiconductor capabilities, reducing reliance on foreign supply chains while positioning the country as a key player in advanced manufacturing as detailed in official statements.

The administration’s focus on economic security is also shaped by external pressures. China’s recent economic coercion—such as export controls on rare earth elements and bans on Japanese seafood— backfired, consolidating public support for Takaichi’s firm stance on national sovereignty. These episodes highlight Japan’s efforts to diversify supply chains and reduce vulnerabilities, with China’s share of seafood exports to Japan plummeting from 43% in 2023 to 14% by 2025 according to CSIS analysis.

Domestically, Takaichi’s fiscal measures include a 13.9 trillion yen stimulus package to combat inflation and rising living costs, funded by a supplementary budget and targeted tax reforms. However, challenges persist, including high public debt (government debt-to-GDP remains elevated) and skepticism about the efficacy of large-scale stimulus. Critics also question the feasibility of multiyear defense procurement commitments amid budgetary constraints.

Takaichi’s strategy reflects a broader geoeconomic realignment, emphasizing strategic indispensability through partnerships with allies and investments in critical technologies. While risks remain, her administration’s twin focus on economic resilience and security underscores Japan’s determination to navigate an increasingly volatile global landscape as stated in official communications.