Pacifist Japan takes big step towards becoming major arms exporter
Australia’s landmark purchase of Mitsubishi frigates offers model for future sales of warships, missiles and radars
Australia’s choice of Mitsubishi Heavy Industries as its preferred supplier for a new batch of frigates marks a huge step in Japanese efforts to become a major arms exporter at a time of rising regional tensions and stretched defence supply chains.
But analysts warn that Japan will have to overcome production capacity and labour constraints to demonstrate it can offer a real alternative to the US, European and South Korean defence suppliers.
MHI’s $6.5bn frigate deal, which Tokyo and Canberra announced this week and expect to finalise early next year, would be the first international sale of a complete Japanese defence platform with lethal capabilities since the second world war and a model for future exports of warships, missiles and radar systems.
“This deal is a major breakthrough for Japan,” said Hirohito Ogi, a senior research fellow at the Institute of Geoeconomics and former defence ministry official. “This will further motivate the Japanese defence companies to seek other opportunities for international arms transactions.”
MHI’s success comes as arms contractors ride a surge in global defence spending fuelled by conflicts in Ukraine and the Middle East, and as US allies in the Indo-Pacific strengthen their militaries to counter China’s increasing might.
Japan in 2014 lifted a self-imposed ban on almost all arms exports that had since the late 1960s restricted the country’s technologically powerful industrial groups to supplying its Self-Defense Forces.
But big deals have proved elusive since Japan lost out to France on a $35bn submarine supply deal from Australia in 2016.
Ogi said a major difference this time was that “the current international arms market is characterised by a lack of supply capacity”.
“The US cannot meet all the demands of its allies for its weapons,” he said. “Australia needed the capabilities that Japan could provide.”
Analysts said Japan’s defence industry had learned from the previous failure to tailor its product to Australia’s needs. The private sector also gave its support to a more sophisticated government campaign.
MHI offered an upgraded version of its Mogami-class frigate, which only requires 90 crew members — compared with the 120 needed on the vessel proposed by Germany’s Thyssenkrupp — yet is bigger, allowing the longer cruising range and larger weapons capacity Canberra wanted.
Japan was also able to guarantee delivery of the first vessel by 2029, plugging a gap caused by the retirement of Australia’s existing Anzac-class frigates, and could promise interoperability with the US Navy.
Despite a higher upfront price, the Australian government insisted Japan’s warships would be cheaper when their lower weapons and personnel costs, as well as longer hull life, were factored in.
Jennifer Parker, an associate at the Australian National University’s National Security College and former naval officer, said Japan’s frigates were “clearly, on paper, the best ship” for Australia.
Japan is under consideration to co-operate on undersea autonomous technologies under pillar two of Aukus — the trilateral security pact between Australia, the UK and the US. Given that, Masashi Murano, senior fellow with the Hudson Institute’s Japan chair, said its selection to build the frigate took on a “broader significance” as Tokyo and Canberra were likely to deepen collaboration on stealth technologies.
Tokyo is already developing a fighter jet with the UK and Italy that the three countries hope to sell internationally to recoup development costs. Japan also possesses significant capabilities in advanced air defence missiles and space technologies, all potential candidates for export.
In 2023, Japan amended its arms export rules to allow the shipment of Patriot air defence missiles to the US so that Washington could send its own stocks to Ukraine.
However, arms exports remain a sensitive political issue in the constitutionally pacifist country. The government still only allows the export of lethal weapons under conditions such as requiring the importing country not to be involved in an active conflict.
It may also be a challenge for Japanese arms suppliers to find sufficient production capacity for exports, as domestic demand is spurred by a planned rise in defence spending to 2 per cent of GDP by 2027, up from 1.8 per cent.
Yoshinori Kanehana, chair of Kawasaki Heavy Industries, said in January that the defence sector was “suffering” from red-hot orders. He cited annual orders for the CH-47 Chinook helicopter that KHI produces under licence from Boeing jumping from six units in 2017 to 17 last year.
“We cannot build a factory in a short period,” he said, adding that it was managing with its existing production capabilities. “It is now time for us to increase capacity. We don’t have enough people. We need to train the people, take from the other divisions to train to do military planes, as well as hiring from outside, but it is very difficult.”
Japan will produce the first three of 11 frigates at home, with the remainder built in Australia with local partner Austal. Corey Wallace, associate professor at Kanagawa University, said that could be very challenging, given Japan’s lack of experience with overseas defence “maintenance, services and supply chain” management.
Parker at ANU warned that problems delivering the frigates could damage ties between Japan and Australia, which have been blossoming. But if MHI can deliver, Japan could carve itself a place in the global arms industry.
“There are a lot of tier-two or tier-three military powers that can’t afford US equipment,” said Wallace. “Japan now has a fantastic opportunity to dispel the external factors and perceptions that were limiting it from becoming a major arms exporter.”
