Japan Real Time Charts and Data

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Japan related comment. He also maintains a collection of constantly updated Japan data charts with short updates on a Storify dedicated page Is Japan Once More Back in Deflation?

Tuesday, May 26, 2009

A case of need

where the need for markets for its industrial sector is causing Japanese leaders to reconsider a longstanding policy. Nikkei is reporting that the Japanese government has decided to lift its ban on arms exports by domestic companies.

"TOKYO (Nikkei)--The Japanese government decided Saturday to relax its rules on arms exports to allow more joint development and production of weapons with other nations and enable shipments to countries with which Japan co-develops arms. The move is aimed at reducing procurement costs and stimulating the domestic defense industry by promoting joint development and production of key arms, such as next-generation fighter jets, with the U.S. and Europe."

Warships, aircraft, armored personnel carriers, UAV's, missiles...these are all things that Japan's excess industrial capacity could be reconfigured to produce relatively quickly. As economic conditions remain difficult, we can expect to see changes in long-held attitudes as national leaders search for alternative markets for idle production capacity.

According to Wikipedia's entry on the Defense Industry of Japan, the country's "indigenous suppliers [have] developed and produced an almost complete range of modern equipment, including aircraft, tanks, artillery, and major surface and underwater naval combatants". The same source indicates that historically "Nearly 60 % of Japanese defense contracts were awarded to five large corporations: Mitsubishi Heavy Industries, Toshiba Corporation, Mitsubishi Electric Corporation, Kawasaki Heavy Industries, and Ishikawajima-Harima Heavy Industries Corporation. "

As an indicator of the potential for growth, the Wikipedia source references "A secret memorandum circulating among defense contractors in 1988 estimated that lifting the export ban would result in Japan's capturing 45 % of the world tank and self-propelled artillery market, 40 % of military electronic sales, and 60 % of naval ship construction".

In particular, the Mitsubishi F-2 has been put into service as a successor to the F-16. This aircraft might make inroads in the international market if the manufacturer was allowed to make foreign sales.

The need for new markets will likely overcome domestic political opposition to foreign arms sales.