A Taiwan "What If" and the News About Rising Defence Spending — How Should I Take It?

Corresponding episode: August 2026 issue, Part 2, ②

Following on from my last post, this is the second half of a conversation about the future of the Chinese Communist Party, featuring Yoshinori Kitano. This part covered "two scenarios for regime collapse" and, building on that, what defence strategy Japan should be pursuing.

Note: This post reflects my own personal thoughts, prompted by a paid piece of content — a conversation featured on "Power Game," a subscription programme run by Direct Publishing — that I purchased. Mr. Kitano's website is rpejournal.com. This post covers the speakers' own analysis and forecasting, not confirmed factual reporting.

More in this series

• Sinking Giants, Rising India — What a Diplomatic Report Taught Me About Retirement (on PM Takaichi's India visit and geopolitical diversification)
• Cracks Among the Autocratic Three — Letting Go of the "Monolithic Bloc" Idea (on the internal dynamics of the "autocratic three")
• If Putin's Grip Loosens — A "Scenario" of a World Reshaped by Drone Warfare (a near-future hypothetical)
• International Relations as a Mirror for Human Relationships (the series wrap-up)
• Trump's "Total Defeat"? What a US-Iran Deal Taught Me About Handling Information in Retirement (on the US-Iran ceasefire memorandum)
• America's "Backyard" Is Being Redrawn (on Latin America's political upheaval and the "Donroe Doctrine")
• Will the Chinese Communist Party Really Collapse? What a Comparison with the USSR Taught Me About Long-Term Investing (on the USSR comparison)
• The Real Reason Everyone Keeps Visiting Beijing (on great powers approaching China)
• Dealing with a Neighbour Who's Profitable but Scary (on Southeast Asia's balancing diplomacy)
• Japan Might Get Another "Northern Territories" Problem (on the Ukraine frontline)
• Japan's Birth Rate Hit 671,000 (on the declining birthrate and mandatory retirement)

A topographic view of a narrow strait separating two landmasses, seen from above (Photo: Matvey Logachev / Unsplash), chosen with the geographic closeness across the Taiwan Strait in mind.

Two Paths: Invade, or Don't

Here's what the "two scenarios" in the conversation looked like.

The first: having lost economic legitimacy, Xi Jinping decides to invade Taiwan to shore up his standing. In this scenario, tough sanctions from the US, Japan, and Europe, combined with military support to Taiwan, bog down the invasion, further exhausting China's economy — and, ironically, accelerating the regime's collapse. The point that struck me was the logistics: the Taiwan Strait is 160km wide, and any landing force would be exposed to missile and drone strikes for hours during the crossing — hardly a straightforward operation.

The second: Xi avoids invading Taiwan altogether, but the economy keeps grinding down anyway, as foreign capital withdraws and controls tighten — echoing what happened to Russia after its 2014 annexation of Crimea. In this version, the one-party system eventually hits its limits after Xi's death or ouster, when a successor turns to liberalisation to try to revive the economy.

What struck me in both scenarios was the timeline given: not years from now, but sometime in the 2030s or beyond.

The End of a Rather Convenient Arrangement

The other main thread of the conversation was the changing nature of the US-Japan security alliance. During the Cold War, apparently, that alliance served two purposes for the US: keeping Japan out of the Soviet orbit, and keeping Japan from re-emerging as a military power. As a result, Japan could keep defence spending low and pour its resources into economic growth instead — frankly, a rather advantageous arrangement, and I found that framing hard to argue with.

But as American power has relatively declined, that arrangement is apparently coming to an end. Against China's roughly ¥37 trillion defence budget, Japan spends around ¥8 trillion — a gap that isn't realistic to close alone. Beyond raising its own defence spending, the conversation suggested, Japan's security strategy going forward will need to lean on a broader network of quasi-alliances with Europe, India, Australia, South Korea, and Southeast Asian nations.

What This Meant for Me, Living in Retirement

News about rising defence spending isn't unrelated to household finances. Any further increase in defence spending as a share of GDP eventually shows up in tax burdens and national finances. That's not entirely separate from pensions and social security either, so I want to keep watching this less as "just a security story" and more as something that touches retirement finances directly.

Keeping a long view on travel plans across Taiwan and Asia. Since I spend winters travelling through Taiwan and Korea, if something like Scenario 1 ever became reality, it would obviously affect my travel plans. That said, the timeline given — the 2030s or later — doesn't call for rushing to change anything now. Still, the countries mentioned in the context of "quasi-alliances" — India, Australia, Southeast Asian nations — happen to overlap heavily with the regions I already travel through, so I'll keep half an eye on how things develop there.

Assume "convenient arrangements" eventually come to an end. The US-Japan security story is about nations, but the lesson — that a relationship where one side quietly absorbs the cost for the other doesn't last forever — feels applicable to personal relationships and business arrangements too. Leaning too heavily on someone else's goodwill, or a system that happens to favour you, tends to need revisiting eventually. It's a reminder, in both finances and relationships, not to lean too hard on the assumption that today's favourable terms will simply continue indefinitely.

In Closing

This was a conversation about big "what ifs" — a Taiwan invasion, regime collapse — but the timeline given wasn't a matter of years, but of the 2030s and beyond. There's no need to rush into major changes. Still, keeping this kind of long-term scenario somewhere in the back of my mind, while gradually adjusting my finances and travel plans as things develop, feels like the realistic way to approach it in retirement.

About the Source

This post is based on a paid conversation I purchased from "Power Game," a subscription programme run by Direct Publishing, featuring Yoshinori Kitano. It is not a reproduction of that content, but my own personal reflections and thoughts prompted by it. Please note that the content discussed here reflects the speakers' own analysis and forecasting, not confirmed fact.

About Yoshinori Kitano Kitano is a geopolitical and international affairs analyst, with study experience in Moscow, Russia. He publishes widely read newsletters and books analysing world affairs through the lens of national strategy and geopolitics, and serves as the lead instructor for Direct Publishing's "Power Game" subscription programme. Website: rpejournal.com

You can find details of the "Power Game" programme Mr. Kitano teaches here (Japanese language).

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