Abe’s Plan for Japan Defense Exports Fizzles with Sub Loss

Bloomberg

27 April 2016

Soon after a Japanese Soryu submarine sailed out of Sydney Harbour on Tuesday, the Australian government rejected Japan’s bid for a $39-billion contract to renew its aging sub fleet.

The decision dealt a blow to Prime Minister Shinzo Abe’s effort to globalize Japan’s defense industry and build a bulwark against China’s growing naval power. Australia chose France’s DCNS Group to produce the 12 vessels over Japan’s Mitsubishi Heavy Industries and Thyssenkrupp AG of Germany.

Japan’s bid was a pillar of Abe’s push to loosen the restrictions of Japan’s seven-decade-old pacifist constitution in the face of a territorial dispute with an increasingly assertive China. A successful bid would also have helped Abe promote his idea of a “security diamond,” linking Japan with Australia, the U.S. and India to counter China’s maritime expansion and secure freedom of navigation in the region.

“Abe has really put his neck out there,” said Richard Bitzinger, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. “He had to contend with 50 years of reluctance to export arms. A big sale like this would have really proven the rightness of his cause.”

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