This is the first of a two-part article on Japan’s defense-industrial base and arms export plans.
In the twilight of his presidency, Dwight Eisenhower warned his country to be on the watch for the pitfalls of the military-industrial complex, an arms partnership between defense contractors and the military, born of World War II and fed by Cold War competition. While Eisenhower gave his famous speech in 1961, half a world away its friend Japan could only look on jealously — something Eisenhower was warning against was something Japan once had and wanted back. Now in 2021 Japan is closer to realizing the return of an export-driven arms industry than it has ever been in the post-Cold War world. This industry seeks to improve both Japan’s economic and diplomatic situation in the Indo-Pacific, and by extension serves to enhance the U.S.-Japan alliance’s position as well.
Historians and students of Japan are aware Japan once had a military-industrial complex of its own. After World War II, U.S. occupation authorities effectively and purposefully dismantled Japan’s military-industrial complex while pursuing its mantra of “demilitarization and democratization.” This necessarily included the gargantuan zaibatsu conglomerations responsible for much of its funding and manufacturing (though these organizations have since morphed into other roles and are still alive today). As early as 1947, Japan made rearmament a high priority. Events soon played into Japan’s hands, and then-serving Prime Minister Yoshida Shigeru went so far as to call the Korean War that broke out in 1950 a “gift from the gods,” as recorded by Col Frank Kowalski, chief U.S. architect of Japan’s post-World War II rearmament, in his book “An Inoffensive Rearmament.” While this remark is a favorite target of Korean criticism, Yoshida’s statement came mostly from domestic motivations; when the U.S. redeployed its occupation forces from Japan to the Korean theater, as Kowalski relates, Japan had a real need to rearm in order to replace the role these occupation forces played as domestic peacekeepers. Post-war Japan was so completely demilitarized that it was allowed to have no organizations, including a domestic military defense force, which could potentially blossom from domestic military revanchism. So, while the occupiers were out, Yoshida with a great deal of U.S. assistance helped craft Japan’s National Police Reserve, which slowly evolved into today’s Japan Self Defense Forces.
The reasons why today’s Japan wants to pursue foreign military sales go deeper than profit and security. In many ways the Japanese national story since the end of the World War II as told from their perspective has been one of recovery, revival, and reassertion. After its rock-bottom position at the end of the war, seeking greater prominence and position on the international stage after a failed gambit for empire was the clear natural path to redemption. Japanese rearmament thus goes hand-in-hand with industrial and economic independence and recovering national prestige.
By leaving its national defense largely in the hands of the U.S. after World War II, Japan was able to direct its resources towards economic recovery in time to host its “coming out party” during the 1964 Tokyo Olympics, a major economic and prestigious milestone in the minds of most Japanese. After that event, economic growth continued and was always linked to national prestige in the national consciousness. Material wealth was a sign of recovery, success, and proof that Japan was not a nation the world could keep down forever. In the 1970s, “Made in Japan” was a pseudonym for shoddy, cheap junk; in the 1980s and beyond, it changed to mean quality and dependability. Japan even revived conquest of a kind as it used its newfound economic girth in the 1980s to purchase prestigious landmarks and properties abroad. Regardless of one’s feelings on the topic, in Japan conscious efforts towards economic improvement are forever intertwined with increasing Japanese national prestige. A successful domestic arms industry, too, would be a major extension of this national effort.
Like every other commodity, arms have markets and widely differing qualities. Unlike other commodities, arms are also essential to national defense, and buyers are also direct competitors who threaten each other’s security. Thus, states tend to spend a premium on getting the best quality arms they can possibly afford. This naturally drives the legitimate international arms market towards favoring top-of-the-line, proven, and expensive gear over old, discounted, or questionably effective equipment. Given this, is it possible Japan can enter this market when arriving comparatively so late?
In short, yes. While it can be instructive to examine which state is producing and exporting the most arms, in reality the global arms industry competes on both a company-to-company basis and on a state-to-state one. A state seeking to buy arms begins its search by sifting through geopolitical considerations and determining from which states it can shop; it ends its search by selecting a dependable company. This selection is of immense importance; defense manufacturers are unique and possess their own reputation beyond that of their home country. This means Japan, if it is able to establish a company which can produce quality arms, can combine its reputation for quality industrial goods to find a place in the global defense market.
Today, Japan’s nascent arms export industry has a relatively clean slate, mostly unburdened by the zaibatsu of the past and free to develop its path — an arms export industry with Japanese characteristics. Japan’s 2015 establishment of the Acquisitions, Technology, and Logistics Agency (ATLA) indicates as much. It only needs a good domestic company or companies that have reliable international reputations and can answer the call to produce high-quality defense articles at a dependable pace and affordable price. This will be difficult; years of arms export prohibitions (1967 until 2014, discussed below) have left Japan’s domestic defense industries relatively atrophied compared with other developed states. While Japan is able to produce some weapons for itself, like its own small arms munitions and its own naval vessels, its policies have prevented domestic defense industrial growth and have squelched competition. This has left today’s Japan with only two realistic corporate options upon which the backbone of its nascent arms industry could be built, at least at first: Mitsubishi Heavy Industries (MHI) and Kawasaki Heavy Industries (KHI). A few other supporting roles exist to draw from, for instance Ishikawajima-Harima Heavy Industries (IHI) and a few scattered financial firms, but only MHI and KHI seem to possess the necessary foundation to make a nascent arms industry work.
Naturally, there are problems with this reality. Take, for example, MHI. MHI’s name and presence are ubiquitous amongst defense contractors who live in Japan, and while their record is impressive by Japanese standards, critics say its conduct may be holding Japan back more than it is helping. MHI bears the legacy of one of the “Big Four” pre-war zaibatsu, and while this comes with pride and accomplishment, it also comes with preferential government treatment to secure its solvency and unique practices that often infuriate foreign partners. A casual query about MHI to any foreign defense contractor living in Japan returns opinions often ranging from dismissive to enraged. These contractors are quick to complain about MHI’s virtual government monopoly on certain defense article manufacturing, government protectionism, and difficult dialogue.
For the Japanese government’s part, they seem to be stuck; unwilling to unleash MHI and KHI to truly compete in an international arena where Japan has essentially no market share would surely result in both getting crushed, but diversifying by allowing expanded domestic defense manufacturing competition could end up with no winners at all if Japan cannot simultaneously find markets for its defense articles abroad. Japan thus seems to be unable to choose between whether it wants to first give birth to a chicken or an egg, so it does neither.
Lieutenant Colonel John Wright is a U.S. Air Force officer, pilot, and a Mike and Maureen Mansfield Fellow. He is a Foreign Area Officer who specializes in Japan, and author of the book “Deep Space Warfare: Military Strategy Beyond Orbit.” The views expressed in this article are solely those of the author, and not necessarily those of the U.S. Air Force, U.S. Government, Mansfield Foundation, or any other government or government entity.