As part of the new strategy, the government said it plans for more "proactive" security roles for the country's Self-Defense Forces abroad, Kyodo News reported. The strategy will also have new guidelines for arms exports.
Japan has so far followed a policy of pacifism in place since the end of World War II.
China's military expansion and its assertiveness in both the East China Sea and the South China Sea have become a major concern for its neighbors. Japan is already locked in a bitter territorial dispute with China over the Senkaku Islands in the East China.
Although the islands are under Japanese control, China has stepped up its claims on the islands by sending its surveillance ships to the region and taking other steps. Concerns have also risen sharply after China last month announced the establishment of an air defense identification zone in the East China Sea, overlapping those of Japan and South Korea.
The Financial Times said the 10-year security strategy also calls for a build-up of naval forces. The Cabinet also approved immediate guidelines, calling for $239 billion in defense spending in the next five years. The report said most of the new military hardware to be acquired by Japan will be sea and air-related items such as destroyers including those equipped with advanced Aegis guided-missile systems, six new submarines, and 20 fighter jets. The size of Japan's SDF currently is about 159,000.
China's military budget, on the other hand, has been growing substantially every year for the past decade.
Japan's new strategy also will seek to further strengthen security alliance with its main ally the United States, which has refused to recognize China' air defense zone.
"The strategy is designed to make our foreign and security policy clear and transparent both at home and abroad," Prime Minister Abe told reporters. "We will do our part in contributing to global peace and security further."
The strategy will serve as the basis for the newly established National Security Council, Kyodo said. The report said the Abe government is also expected to decide likely by next year whether to lift its self-imposed ban on exercising the right to collective self-defense, or defending an ally under armed attack.
After the Cabinet approval of the strategy, Foreign Minister Fumio Kishida said Japan will continue explaining its intentions to China and other countries to gain their acceptance.
USA Today quoted U.S. Secretary of State John Kerry, who was visiting the Philippines Tuesday, as saying Japan's guidelines reflect the "joint vision of Japan-U.S. cooperation in terms of security for the region and elsewhere." He added: "This is not a sudden response to something or anything that anybody should get particularly upset about."
In an editorial Wednesday, China's official Xinhua News Agency said: "Forget about Abenomics! Watch out, "Abe-military" is making its debut."
Abenomics refers to the economic policies of Prime Minister Abe, designed to lift Japan's economy from it 15 years of deflation.
Xinhua said Japan's new security package "is considered a turning point in Tokyo's understanding of security and a signal that the dangerous 'Abe-military' has come on stage."
"To conceal Japan's wild ambition of becoming a military power, Abe tailored for his security scheme a phony coat in describing his plan as becoming a 'proactive contributor to peace'," Xinhua said.
"Even worse, the Abe administration fabricated a 'China threat' in these documents to justify its audacious military ambitions," the editorial said.
Commenting on Japan's strategy, Grant Newsham, a senior research fellow at the Japan Forum for Strategic Studies in Tokyo, told USA Today: "This is a sensible plan, and it's long overdue. It lays out a road map of how the Japan Self Defense Force will transform into something more capable and more able to defend Japan."
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