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Fiscal Power, Undersea Deterrence and Chip Design: East Asia’s New Strategic Equation
What is the central argument of “Fiscal Power, Undersea Deterrence and Chip Design”, and why does it matter for European defence and dual-use markets?
Fiscal Power, Undersea Deterrence and Chip Design: East Asia’s New Strategic Equation: Japan is moving toward a more assertive. Defence-finance analysis; 5-pag…
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Original DFM publication · DFM Analysis report · 2025-12-10
Japan is moving toward a more assertive defence posture by changing both how it raises money at home and what it is prepared to sell abroad. Within the ruling Liberal Democratic Party, discussions are under way on an income tax increase from 2027 explicitly earmarked to sustain higher defence outlays, in linea with the government’s commitment to reach defence spending of around 2 percent of GDP by the end of the decade.
At the same time, Tokyo is preparing to ease key operational guidelines on arms exports by scrapping the so-called “five-category rule,” which currently limits the transfer of fully assembled equipment to a narrow set of non-lethal systems.
This analysis answers: What is the central argument of “Fiscal Power, Undersea Deterrence and Chip Design”, and why does it matter for European defence and dual-use markets? What does this mean for European defence funding, procurement and investment decisions? How mature and defensible is the position described in “Fiscal Power, Undersea Deterrence and Chip Design”? Which European actors, programmes and funding instruments are most exposed?
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Fiscal Power, Undersea Deterrence and Chip Design: East Asia’s New Strategic Equation
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At the same time, Tokyo is preparing to ease key operational guidelines on arms exports by scrapping the so-called “five-category rule,” which currently limits the transfer of fully assembled equipment to a narrow set…
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