Pacific Weekly #81
Good morning and happy Sunday,
This is the first edition of Pacific Weekly for 2026. Let’s jump right in.
Reporting Period:
Bottom-Line Up Front:
1. On December 26, Japan’s governing cabinet published a $780 billion budget proposal for FY2026. The proposal allots $58 billion for defense spending, a notable increase. The funds will be used to advance Japan’s security strategy as identified in a 2025 White Paper.
2. On December 29, Chinese media confirmed the commencement of “Justice Mission 2025.” The exercise, which encircled Taiwan, showcased the PLA’s ability to conduct joint operations. Taiwan responded by launching the “Rapid Response Exercise.” The exercise officially concluded on December 31.
3. On December 31, Chinese and South Korean foreign ministers shared a phone call, denouncing Japanese interventionist rhetoric. South Korea’s president, who is arriving in China today, stated that Seoul will continue to respect the One China principle.
Japan Approved Record Defense Budget Plan For FY2026
Summary
On December 26, Japan’s governing cabinet published a $780 billion budget proposal for FY2026. The proposal allots $58 billion for defense spending, a notable increase. The funds will be used to advance Japan’s security strategy as identified in a 2025 White Paper.
Findings
Background: On July 14, 2025, the Japanese Ministry of Defense published its Defense of Japan 2025 White Paper (Japanese MOD). The document detailed fundamental mission sets and areas needing improvement across the Japanese Self-Defense Force, heavily influencing the Takaichi government’s budget proposal.
Comment: Read more about the white paper from Pacific Weekly #59.
Budget Plan: On December 26, Japanese Prime Minister Takaichi’s Cabinet approved a 2026 defense budget plan valued at $58 billion (AP News). The proposal puts Japan’s total FY2026 budget at $780 billion (NHK World).
What’s Next: The fiscal year begins in April, so the budget proposal is expected to enter Japan’s legislature for voting in February or March (Naval News, AP News). It is expected to pass.
Details: Early reporting by NHK estimated that the defense budget would focus on acquiring or upgrading Type-12 surface-to-ship missiles, hypersonics, and advanced fighters (NHK). Additionally, a large portion of the budget will be used to fund a coastal defense system, dubbed SHIELD (NHK).
The budget also includes funding for four types of vessels for the Japan Maritime Self-Defense Force (JMSDF), MQ-9B drones, and Aegis upgrades (Naval News).
Why This Matters
Japan’s approval of a record FY2026 defense budget marks a decisive acceleration away from its post-war, strictly defensive military posture toward a credible, multi-domain deterrent force.
Additionally, the scale and scope of the budget (particularly investments in long-range Type-12 missiles, hypersonic capabilities, Aegis upgrades, and the SHIELD coastal defense network) suggest Tokyo is eager and willing to adopt a role as a deterrent force with advanced stand-off capabilities. This directly complicates Chinese and, to some extent, North Korean strategies regarding a conflict within the First Island Chain
China Launches Two-Day Military Exercise Around Taiwan, Largest To Date
Summary
On December 29, Chinese media confirmed the commencement of “Justice Mission 2025.” The exercise, which encircled Taiwan, showcased the PLA’s ability to conduct joint operations. Taiwan responded by launching the “Rapid Response Exercise.” The exercise officially concluded on December 31.
Findings
Announcement: On December 29, Chinese state media confirmed the sudden execution of PLA activities around Taiwan (Reuters). The exercise is being dubbed “Justice Mission 2025” and is the largest exercise of its type since the Joint Sword 2024A and Joint Sword 2024B exercises.
Justice Mission 2025: The People’s Liberation Army (PLA) Eastern Theater Command, tasked with the mission to seize Taiwan, launched exercise Justice Mission 2025 with components of the PLA, PLA Air Force, PLA Navy, and PLA Rocket Force (Reuters). The exercise has showcased China’s ability to rehearse joint operations expected during an invasion of Taiwan, including naval strikes, blockades, air strikes, command and control, amphibious assault, ISR, and space operations (Global Times). Taiwan’s Ministry of National Defense reports that 27 PLA rockets landed within Taiwan’s nautical zone (Focus Taiwan). Between December 30 and 31, Taiwan’s MND reported 207 aircraft sorties and 47 naval incursions or patrols in or around Taiwanese territory (ROC MND, ROC MND).
On December 31, China’s Eastern Theater Command announced the conclusion of Justice Mission 2025 (PBS).
Taiwan Response: On December 29, shortly after Justice Mission 2025 began, the Taiwanese Ministry of National Defense announced that “Rapid Response Exercise” had commenced in response to the Chinese activity (MND ROC). Included in the response are Taiwan’s air defense, anti-ship, coastal defense, and naval forces (MND ROC). The entire Taiwanese military remains on high alert (MND ROC).
Why This Matters
The Justice Mission 2025 exercise is another step in the perpetual deterioration of the Cross Strait relationship, and a step closer to China’s promised invasion of the island by 2027.
The exercise was an opportunity, on a strategic level, for China to progress its reunification narrative. From an operational and tactical perspective, the exercise was an opportunity for PLA personnel to rehearse schemes of maneuver and refine competencies related to their respective mission sets.
If Justice Mission will mimic the Joint Sword exercises from 2024, then it is likely there will be a similar iteration in the following months.
Ahead Of Bilateral Visit, China And South Korea Share Diplomatic Rhetoric Against Japan
Summary
On December 31, Chinese and South Korean foreign ministers shared a phone call, denouncing Japanese interventionist rhetoric. South Korea’s president, who is arriving in China today, stated that Seoul will continue to respect the One China principle.
Findings
China-South Korea Phone Call: On December 31, Chinese Foreign Minister Wang Yi held a phone call with South Korean Foreign Minister Cho Hyun (Inquirer). During the call, Wang reportedly urged Cho and South Korea to adhere to the One China principle and reject Japanese Prime Minister Takaichi’s suggestion that Japan may intervene to defend Taiwan from Chinese aggression (Inquirer).
Cho reportedly stated that South Korea will continue to “respect” the One China principle, which claims the People’s Republic of China is the legitimate Chinese nation, and that Taiwan is an inalienable part of it (Inquirer).
Background: In November 2025, Japanese Prime Minister Takaichi stated that Tokyo could take military action if Beijing attacked Taiwan. The policy stance, which is uncharacteristically interventionist for Tokyo, has rapidly deteriorated relations between China and Japan (Reuters).
During the ministerial phone call on December 31, Wang Yi reportedly played into China and South Korea’s shared history from World War II, when Imperial Japan brutally occupied both nations (Inquirer).
Presidential Visit: Today, January 4, South Korean President Lee Jae-myung arrives in Beijing for a four-day visit to China (Inquirer). This is Lee’s second visit with Xi Jinping in two months, indicating China’s interest in forging closer economic and diplomatic relations with South Korea (Reuters). Lee, an admirer of Xi Jinping, stated that his administration aims to “restore” ties with Beijing and expand cooperation on trade and technological innovation (Reuters).
Why This Matters
South Korea is in an interesting geopolitical position, whereby Lee can significantly alter the regional political and security dynamics due to its relationship with the U.S. and China and North Korea.
It seems as though Lee is attempting to be overtly pragmatic; expanding relations with Xi and China, but carefully toeing around the fact that Beijing and Pyongyang are security partners and aggressors with regional ambitions. Likewise, Lee seems intent on avoiding any discussion of the close security and economic partnership with the United States, and the nearly 29,000 U.S. troops stationed on the peninsula to deter the North Koreans.
End Brief
That concludes this edition of Pacific Weekly.
Thank you for reading!
— Nick
This publication is an Open-Source Intelligence (OSINT) product and does not contain Controlled Unclassified Information (CUI) or Classified Information.