This may seem on the surface like a classic case of balance-of-power politics and the security dilemma — as one state’s capabilities rise other states attempt to counterbalance.

But balance-of-power politics has never been a simple thing.

For all the attention Japan has received for its rising defence budget, the actual rise marks just a small adjustment, a 3 per cent increase over the 2012 budget that will be used mainly for adjustments in defence posture to defend remote territories (namely, the Senkaku/Diaoyu Islands). As Japan watchers have already pointed out, the hike is most important for symbolic reasons.

Despite all the talk of its defence budget increase, Japan remains a stingy balancer. It still has not breached its 1 per cent of GDP limit on defence expenditures since the limit was established as a cabinet order in 1976 (with the exception of the Nakasone administration in 1980s), and defence expenditures have stayed relatively stable at around US$60 billion for the last decade. While it has been using its resources more efficiently within these limits, Japan still privileges economic issues and social welfare over its defence issues when it comes to government spending. For the most part, it still relies on its relationship with the United States to keep the cost of its defence policy down. As Tsuyoshi Kawasaki has argued, Japan is sensitive to the balance of power and the competitive nature of the international system, but also sensitive to the cost of military balancing.

If Japan can be described as a stingy balancer, it is not alone. Taiwan’s defence spending has remained relatively flat, even as China’s has been rising. Even though Taiwan’s defence expenditures have stayed at around the US$10 billion mark, as a percentage of GDP defence spending has fallen from around 3 to 2 per cent. Taiwan’s ‘stinginess’ can be attributed to its worries over economic issues (troubles not dissimilar to Japan: low economic growth, low birth rates, and increasing global competition) and improved cross-Strait relations that have led to lower public perceptions of threat.

As a recent CSIS paper put it, the key driver of defence spending trends in East Asia has been the availability of financial resources. Threat perception matters, but so do financial means. States need to balance both the potential for external conflict with the need for economic and social stability. Thus, even if Japan or Taiwan implements the occasional defence surge in response to Chinese provocation, economic considerations will always figure heavily in their decision making. In many cases, qualitative improvements to existing forces, a reliance on technological innovation, and the management of relations with the United States will be used instead of hefty budget increases.

Both Japan and Taiwan has a relationship with the United States that allows for some cost savings but also suffers from ambiguous obligations and commitments.

In the case of Japan, the treaty relationship is constantly plagued by questions of possible entrapment and abandonment. Both the United States and Japan have to constantly consider the costs of becoming entrapped in the other’s security issues, as well as the possibility that the other might abandon them in a time of dire need.

In the case of Taiwan, US commitments rely heavily on symbolic gestures such as arms sales and the deterrent power of possible US intervention. The possibility of US intervention is something that provides great deterrent power, but one that does not fully eliminate the possibility of abandonment as well.

Given China’s rapid economic and military rise, Japan’s and Taiwan’s stagnant defence spending — as well as the recent sequestration in the United States — would seem to be a major cause for concern. Seen from the perspective of traditional realism, the actions of Japan and Taiwan might be seen as dangerously complacent. From this perspective, states should always ensure adequately against external threats. However, the political realities of the balance of power have always been complicated. In reality, political leaders are always balancing the needs for external security with diplomatic considerations and the internal needs of their people.

Daniel Clausen is a graduate of Florida International University’s PhD program in International Relations. He is currently based in Fujisawa, Japan.