China and Trump factor will heat up Asia-Pacific arms race, observers warn

Record defence budgets from Japan and the Philippines come as tensions with China grow and incoming US leader urges allies to spend more

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Japanese military vessels sail towards the country’s southwest in November 2023, for drills on an island seen as vulnerable to China in case of a conflict. Photo: Kyodo

Published: 8:00pm, 5 Jan 2025

The arms race in the Asia-Pacific will intensify this year, observers believe, with several governments in the region – including US treaty allies Japan and the Philippines – planning big boosts to their defence budgets.

The aim is to both counter China and to hedge against uncertainties over incoming US president Donald Trump, they added.

The Japanese government’s 2025 budget approved last Friday included record defence spending of 8.7 trillion yen (US$55 billion), despite recent signs of a thaw in ties with China under Prime Minister Shigeru Ishiba.

It is the 13th straight annual increase in the defence budget as Japan seeks to address concerns over China’s rise and North Korea’s military alignment with Russia, according to analysts.

On Monday, Philippine President Ferdinand Marcos Jnr signed the country’s 2025 budget into law, with defence spending expected to reach a record 315.1 billion pesos (US$5.4 billion). This is more than 30 per cent higher than the 2024 military budget, official Chinese news agency Xinhua reported.

It is also much higher than the original total of 256.1 billion pesos amid heightened tensions with Beijing in the South China Sea.