[Defense Brief Column] Japanese Defense Companies Growing at a Frightening Pace

At the end of 2012, I visited Kuala Lumpur, Malaysia. It was to see the defense exhibition ‘DSA (Defence Services Asia)’. There was a noticeable country: Japan. It was unfamiliar because Japan had been a passive country in defense exports. The booth only displayed the national flag, with no actual weapons or mock-ups. The only thing available was promotional leaflets.

More than ten years later, Japan has changed. Under its pacifist constitution, Japan had effectively enforced a ‘ban policy’ prohibiting the import or export of weapons, but the Abe administration, which advocated military strengthening, established the Three Principles on Transfer of Defense Equipment in 2014. For licensed production items manufactured in Japan with patent fees paid to overseas companies, only parts could be exported to the license-providing countries. The Kishida administration revised this regulation once again. Now, the export of complete weapons is allowed, as well as the transfer of weapons from license-holding countries to third countries. Results have appeared. The Japanese government, with permission from American companies, exported Patriot surface-to-air missiles produced in Japan to the United States. This was the first case of exporting complete weapons. The Patriot surface-to-air missiles were indirectly supplied to Ukraine.

Japan has also expanded into the international market. In September last year, eight Japanese defense companies participated in DSEI, Europe’s largest defense exhibition held in London, UK. Then in November, ten companies took part in the Indo-Pacific maritime defense exhibition held in Sydney, Australia, accelerating their sales efforts. In February this year, the Japanese Ministry of Defense directly led the effort at the Singapore Airshow, leading 13 defense companies. Kawasaki Heavy Industries, a flagship of the Japanese defense industry, exhibited domestic military aircraft models such as the P-1 patrol aircraft and the C-2 transport aircraft.

Japan has also joined hands with the United States. The US-Japan summit held on the 10th marked a milestone in defense policy. The two countries agreed to jointly produce advanced weapons to cooperate in defense and security fields. They launched the Military Industrial Council to systematically discuss development. Furthermore, Japan was allowed to support countries needing security enhancement by providing equipment and infrastructure maintenance. This is the Security Capability Enhancement Support (OSA) system.

The potential of Japanese defense companies is significant. According to the ‘2020 World Defense Market Yearbook’ published by the Defense Technology Quality Institute, six Japanese defense companies rank within the world’s top 100, twice as many as South Korea. These companies sold weapons worth $9.9 billion in 2018, accounting for 2.4% of global arms sales. Fujitsu, ranked 72nd in the top 100, is gaining momentum. It provides IT services to the British Army and has also achieved niche export results.

The technological capability is sufficient. The world’s first aircraft carrier was the Hosho (鳳翔), designed by Japan in 1918. Now, Japan is converting the Izumo-class helicopter carriers?the lead ship Izumo and the second ship Kaga?into aircraft carriers. Fighter development is also underway. Japan is jointly developing fighters with the UK and Italy, aiming for operational deployment in the 2030s. Additionally, leveraging the fact that the US 7th Fleet’s homeport is in Yokosuka, Japan is eyeing the US Navy ship maintenance and repair (MRO) business. Japan’s fighters overlap with the export target countries of Korea’s first domestically produced fighter, the KF-21, and the US Navy ship MRO business poses a threat to Korean shipbuilding defense companies. The current government should not only boast about ‘K-Defense’ achievements. To surpass Japan’s defense exports, mid- to long-term measures must come first.