MELBOURNE — The Japanese government aims to boost its domestic defense industry, according to a newly released white paper, which warned that China’s posture and military activities continue to present “the greatest strategic challenge” to the Indo-Pacific region.
It also pledged to continue to ensure the US-Japan alliance’s technological edge by reinforcing cooperation with the US on defense innovation.
The paper‘s themes were consistent with previous Japanese defense analyses. It was released Tuesday, along with an anime-style English language video summary and pamphlet, diving into topics like AI and other military developments. The summary said the Russian invasion of Ukraine had shown countries the “new ways of warfare” and that domestic defense technology will be critical to achieving “uniquely Japanese” effects in response.
The “new ways” included using relatively simple and inexpensive unmanned systems on the battlefield, such as striking much more sophisticated equipment and key infrastructure of the adversary.
Therefore, “the active utilization of Japan’s advanced technological capabilities developed by both its public and private sectors over the years in the area of national security without being constrained by existing approaches is an essential activity for strengthening Japan’s architecture for national defense,” the paper stated.
Japan has taken measures in recent years to bolster its domestic defense industry, with an example of this being the 2023 Act on Enhancing Defense Production and Technology Bases, which almost doubled the allowable profit margin for government contractors by raising it from eight to 15 percent.
The white paper also noted that defense contractors had taken steps to improve processes, with the number of initiatives and plans submitted by defense companies that were subsequently approved by the minister increasing to 164 in fiscal 2025, from 36 two years before.
However, the white paper cautioned that challenges remained for the country’s domestic defense industrial base, among these being some Japanese companies withdrawing from defense contracting altogether in recent years. Two notable examples of this was Komatsu’s withdrawal from armored vehicle production in 2019, and Mitsui selling off its naval shipbuilding business to Mitsubishi Heavy Industries in 2021.
That “not only undermines the stable procurement of defense equipment essential for JSDF operations, but also causes the loss of a proper competitive environment and innovation in the long term, potentially leading to a loss of Japan’s technological superiority in security,” said the document.
The white paper nevertheless stated that Japan will continue to look outward for opportunities to bolster its defense industry, with the recent sale of Mogami-class frigates and participation in the Global Combat Air Programme cited as ways it is “striving to enhance its partners’ military capabilities and strengthen mid- and long-term relationships with those countries.”
It will also continue to enhance defense cooperation with its treaty ally the US “to ensure the Alliance’s technological edge, interoperability, readiness, and sustained operational capability.”
“Japan will further reinforce cooperation on defense equipment and technology through cooperative analysis and cooperative research in cutting-edge technology, cooperative development and production of defense equipment, improvement in mutual interchangeability, shared use and reinforcement of various networks, expansion of production and maintenance capabilities of U.S.-made equipment in Japan, and efforts to strengthen supply chains,” the white paper stated.
The document also cited the establishment of the Forum on Defense Industrial Cooperation, Acquisition and Sustainment (DICAS) in 2024 “to leverage each country’s industrial base to meet long-term critical capability needs and maintain readiness,” with both countries working towards plans for co-production of systems such as SM-3 Block IIA interceptors and AIM-120 Advanced Medium-Range Air-to-Air Missiles (AMRAAMs).