Draft of Japan’s Defense Equipment Strategy Focuses on Domestic Supply

The Yomiuri Shimbun

16:26 JST, June 18, 2023

The government intends to seek domestically produced defense equipment when acquiring new ammunition, warships and other supplies in the future, according to the draft of a new government strategy.

Formulated by the defense minister based on the law to strengthen production bases for defense equipment, the draft also prioritizes the ability to continue to fight for a long period of time, an element spurred by Russia’s invasion of Ukraine. It likewise stresses the need to protect secrets related to defense equipment.

Regarding exports of defense equipment, the draft calls for promoting them through public-private partnerships.

The law was enacted by the Diet on June 7, and requires the formulation of a basic government policy on strengthening development and production bases for defense equipment. Intended to ensure the stable production of defense equipment and promote exports, it is the nation’s first law to support the domestic defense industry in a comprehensive manner.

The envisaged strategy will replace the current Strategy on Defense Production and Technological Bases, which was devised in 2014. The new strategy presents a specific direction to reinforce such bases, and is scheduled to be released soon before the law will take effect in October.

Referring to increased military activities by China, North Korea and Russia, the draft states that the security environment surrounding Japan has entered a “new crisis.” Given these circumstances, the draft points to the growing importance of the defense industry in helping the Self-Defense Forces carry out their missions.

Companies have withdrawn from the Japanese defense industry one after another, for reasons including low profitability. The draft expresses concern over the growing weakness of the industry’s foundations.

Regarding the acquisition of domestically produced equipment, the draft calls for equipment that will enhance the nation’s ability to engage in combat over a long period. It also states that Japan “should not rely on foreign countries from the viewpoint of maintaining confidentiality” regarding communications and encryption technologies.

Items that could be vulnerable to external threats through economic measures are listed in the draft, with a view to avoiding supply chain risks related to such issues as parts produced in China.

The draft underscores the government’s stance to promote international joint development and other initiatives in case it is difficult to acquire domestically produced equipment.

As Japan cannot create a supply network alone, however, the draft also states, “It is essential to build mutually complementary relationships with allies and like-minded countries.” The government’s intention to unify standards of equipment with allies and comrades is also mentioned.

Under the law, subsidies are provided to companies that export defense equipment to other countries if they have to change the design, wiring or other specifications of equipment to meet those countries’ needs. In addition to major prime contractors, the draft adds supplier companies that will undertake part of the design process to the list of eligible recipients for such subsidies.