TOKYO - Japan's Defense Ministry said in its annual report released Tuesday that the country must strengthen its defense industry, expand arms exports and deepen ties with security partners to reinforce deterrence in the Indo-Pacific region, citing an increasingly severe security environment and "new ways of warfare."

The white paper, "Defense of Japan 2026," stressed the importance of maintaining advanced technologies, including artificial intelligence and drones, as a well as a stable domestic production base as countries compete to develop next-generation defense capabilities.

The roughly 600-page report reviewed security developments from April 2025 to March 2026, with some issues updated through May and the ongoing U.S.-Israeli conflict with Iran through June.

It cautioned that the continued withdrawal or downsizing of Japanese defense businesses could affect the stable supply of equipment for the Self-Defense Forces and lead to a decline in competition, innovation and the country's technological edge.

The report also described defense equipment transfers as a means of supporting the United States and other security partners while strengthening deterrence and promoting regional stability, particularly in the Indo-Pacific.

"Today, no country can protect its own peace and security by itself alone," the report said, adding that Japan revised its defense equipment transfer rules in April to facilitate exports while maintaining its commitment to a peaceful foreign policy.

As examples of expanding security partnerships, the report highlighted cooperation with the United States, Australia's Mogami-class frigate program and the Global Combat Air Program, a joint fighter jet project with Britain and Italy.

It warned that China's military activities intensified during the reporting period, citing aircraft carrier operations in the Pacific, unusually close approaches by Chinese fighter jets to Japanese aircraft and a radar lock-on incident. It also cautioned that Beijing is seeking to normalize its military presence around Taiwan.

It maintained that China's external posture and military activities are "a matter of serious concern" and present "an unprecedented and the greatest strategic challenge which Japan should respond with its comprehensive national power and in cooperation and collaboration with its ally, like-minded countries, and others."

The report described North Korea as an "imminent threat" to Japan's security, pointing to rapid advances in missile technology, including hypersonic weapons, expanded naval and unmanned capabilities and deeper military cooperation with Russia.

It also said the nature of warfare is changing with the widespread use of low-cost drones, AI and information warfare, citing lessons from Russia's invasion of Ukraine and the need for larger stockpiles, stronger domestic defense production capacity and faster adoption of advanced technologies.

The Defense Ministry also released 30-second and three-minute promotional videos on social media platforms, such as X and YouTube, alongside the report in an effort to attract broader public interest.

The longer one is available in Japanese, English and Chinese.

Related coverage: