Navigating New Frontiers: Japan's Expanding Role in Defense and Economic Security Published May 20, 2024 By Elliot Silverberg Wild Blue Yonder--Maxwell AFB -- During a recent seven-day tour of the United States, Japan’s Prime Minister Kishida Fumio reiterated his country’s pivotal international role, emphasizing in a speech before the U.S. Congress that Washington and Tokyo are “global partner[s] … on a spaceship called Freedom and Democracy.”[1] Kishida’s pledge goes beyond words. During his Washington state visit, he and President Joe Biden sealed a comprehensive package of 17 agreements on defense, security, and space cooperation. These included vital, long-awaited measures to modernize alliance command and control structures, expand force planning and interoperability in peacetime and contingencies, and strengthen bilateral intelligence sharing and analysis.[2] Additionally, with Australia and the United Kingdom, the two countries announced that they are exploring collaboration on advanced capabilities through the AUKUS framework––which Japanese leaders have courted since its inception in September 2021.[3] With Canberra, Tokyo and Washington are also developing a trilateral air defense network and undertaking cooperation on drone development, other combat aircraft, and autonomy.[4] Trilateral multi-domain exercises with South Korea, similar exercises with the United Kingdom starting in 2025, and emerging maritime cooperation with the Philippines, affirm Japan’s intensified regional deterrence efforts. Together, these new commitments signify an ambitious agenda for a more integrated alliance with the United States. A New Overton Window The deteriorating international security landscape since Russia’s full-scale invasion of Ukraine has created a new Overton window for global security cooperation in Japan’s domestic politics. In December 2022, Japan released three major strategic documents––an updated national security strategy, national defense strategy, and defense buildup program––that reflect Tokyo’s deepened concern over the fraught geopolitical environment.[5] Today, Japanese politicians speak comfortably about enhancing security relations with other nations, and Tokyo is devoting substantial resources toward ensuring regional stability. In 2015, aimed at China’s Belt and Road Initiative, Japan pledged $110 billion for Asian infrastructure development under a five-year Partnership for Quality Infrastructure (PQI).[6] In 2016, while launching its Free and Open Indo-Pacific vision, Tokyo revised and extended the PQI to $200 billion through 2021, simultaneously widening the partnership’s focus from Asia to the world.[7] More recently, Japan has also committed to growing its annual military spending from 5.4 trillion yen to 8.9 trillion yen between 2022 and 2027. Two years into this significant defense buildup, Tokyo’s defense outlays are up 50 percent as the Japanese Self-Defense Forces (JSDF) upgrade their existing defensive systems and acquire new counterstrike capabilities.[8] Significantly, Japan is expanding its defense technology-sharing efforts. In 2014, Japan’s defense ministry broke nearly fifty years of self-imposed international arms controls and established the Acquisition, Technology and Logistics Agency (ATLA) to streamline and enhance its defense sales and procurement administration.[9] Japan’s defense equipment and technology transfer principles, initially published in 2014 and further refined in 2023, pave the way for Tokyo and its burgeoning defense industrial base to explore new avenues for defense technology co-development, both with the United States and other countries.[10] Last December’s announcement of a Japan-United Kingdom-Italy agreement to jointly develop an advanced stealth fighter by 2035, called the Global Combat Air Program, provides a glimpse into this potential future collaborative environment as Tokyo expands its focus on arms development.[11] Indeed, at their recent meeting, Biden and Kishida highlighted plans for enhanced collaboration on a counter-hypersonic glide phase interceptor as well as a low-earth orbit satellite constellation for hypersonics detection and tracking.[12] A new forum on defense industrial cooperation, called DICAS, holds promise as a platform to integrate these various initiatives into a unified and sustainable model for future co-development efforts. Evolving Public Perceptions Tokyo’s strategic transformation is sending a strong, affirmative message to its current and future security partners. Already, the Japanese foreign ministry’s annual surveys of global opinions point to consistent––and growing––consensus among key like-minded nations, particularly the United States, India, and Australia, endorsing Japan as a crucial partner for the future.[13] Annual surveys of political elites across Southeast Asia, a critical theater for strategic competition with China, also indicate that Japan is by far the most trusted power in the region and a reliable partner in security cooperation.[14] Ultimately, the longevity of Tokyo’s new national security zeitgeist depends heavily on how well politicians in Nagatacho (the seat of Japan’s parliament), and their bureaucratic allies in Kasumigaseki, are able to navigate the headwinds of domestic politics and prioritize public action around the imminent threats facing Japan. Despite being handicapped by political scandal, Japan’s current administration benefits from a supportive public climate around national security issues. Pew Research Center surveys last year underscore this, revealing that 76 percent and 71 percent of Japanese adults perceive China and Russia, respectively, as major threats.[15] More recent Japanese polling conducted in early 2024 highlights even greater apprehension of China, Russia, and North Korea, with nearly nine out of every ten respondents expressing concern regarding the security environment.[16] Still, despite these conducive tailwinds of public concern. Japanese defense industrial growth has been muted at best, with limited overseas engagement and tepid public enthusiasm for investing in weapons exports. While the groundwork is laid for proactive measures, more needs to be done to mobilize public investment in future defense initiatives. To be sure, public support for strengthening Japan’s defense capabilities and expanding its military budget––currently stabilized at around seven out of ten respondents year-on-year––belies the appetite among the country’s political and business elites for committing their resources toward national security objectives. A recent survey of 100 Japanese companies by the Asia Pacific Initiative, a Tokyo-based think tank, found that nearly 80 percent of the firms interviewed were cognizant of economic security risks, and 72.5 percent had been impacted by recent U.S.-China tensions. More significantly, a majority of the companies had already begun taking action to mitigate their international exposure.[17] Economic Security Infrastructure Since the COVID-19 pandemic, Japan has been implementing a comprehensive plan to build more resilient critical supply chains. In April 2020, Japan’s National Security Secretariat––Tokyo’s equivalent of the White House National Security Council––launched a dedicated economic security team, initially with 20 interministerial agents, to coordinate the development of a government-wide economic security strategy.[18] Similar units were also established within key agencies, such as the foreign ministry, to begin systemically identifying and blocking the transfer of sensitive technologies.[19] In October 2021, Prime Minister Kishida established a full-fledged ministerial post for economic security, at the time the world’s first-ever.[20] Soon after, in May 2022, Japan enacted the Economic Security Protection Act which established new systems to ensure stable supplies of critical materials, provision of services using critical infrastructure, development of critical technologies, and for secret patents.[21] Today, Japan’s national security strategy formally designates economic security as one of three key priorities. Japan is also in the process of a major overhaul of its primary cybersecurity government agency in line with a new active cyber defense posture. Tokyo is significantly expanding its cyber capabilities with the creation of a 4,000-strong cyber workforce, to serve as the government’s cybersecurity backbone alongside 16,000 cyber-trained JSDF personnel.[22] Importantly, on May 10, Japan’s National Diet ratified further economic security legislation to enhance protections for confidential information and mandate security clearance checks at government agencies and companies with access to this information. The new security clearance law, once implemented, will take a crucial step toward facilitating domestic public-private and international cooperation on critical technology development.[23] In anticipation of these changes, Japanese companies have already been upgrading their cybersecurity management systems, expanding cooperation on cyber threat information-sharing, and improving their screening practices for employees with access to sensitive information.[24] Tokyo’s prioritization of economic security reflects years of mounting concern regarding its ability to safeguard critical technologies. In 2017, in order to block sensitive technologies from China and North Korea, Japan increased penalties for violations of its export control rules.[25] Tokyo also undertook export control advances in concert with other countries through the 42-member Wassenaar Arrangement, such as restrictions on military-grade cybersecurity software and manufacturing tools for weapons-capable semiconductor parts.[26] In 2018, Japan also became one of the first U.S. allies to ban 5G network suppliers with security risks, a move aimed ostensibly at Chinese telecommunications equipment providers with implicit ties to the People’s Liberation Army.[27] In 2019, Japan tightened its foreign investment requirements in several critical sectors to lower the maximum allowed level of foreign equity participation not requiring prior government notification from 10 to 1 percent.[28] And notably, during the early months of the pandemic, Japan invested $2.2 billion to encourage companies to reshore their supply chains from China or shift production to third countries.[29] Overall, however, rather than a blanket economic decoupling with Beijing, Tokyo favors the careful identification and protection of strategic sectors and technologies. This posture emulates recent U.S. actions to maintain a “small yard and high fence,” defining in precise terms which (often dual-use) critical technologies are most integral to Washington’s core interests.[30] Economic Sanctions Against Russia Nowhere has Japan’s willingness to put its economic interests on the line for geopolitical considerations been more evident than through its actions in response to recent events in Ukraine. Since February 2022, Japan has levied at least thirty rounds of sanctions against Russia and Belarus.[31] Notably, Japan also broke with its own long-standing weapons export rules to transfer Japan-made Patriot surface-to-air missiles to the United States in order to replenish depleted U.S. weapons stocks for Ukraine’s defense, a decision which Moscow warned would incur “serious consequences” for Tokyo.[32] The same 100-company survey by the Asia Pacific Initiative revealed that 69.1 percent of respondents have been impacted by Japan’s sanctions against Russia, and a further 13.6 percent have seen their business interests harmed as a result.[33] In spite of these actual economic repercussions, another industry survey conducted during the early months of the war––of 168 major Japanese companies in Russia––revealed that 20 percent of the firms planned to cease their operations with Moscow.[34] Another Japanese poll in 2022 found that 86 percent of the Japanese public approved of the sanctions supporting Ukraine’s defense.[35] This is in spite of the fact that total Japan-Russia trade volume cratered to $9.6 billion by the end of 2023 after tripling from $18.7 billion in 2020 to $55 billion in 2022.[36] In 2022 alone, Russia was Japan’s second-largest supplier of raw aluminum, third-largest supplier of platinum, fourth-largest supplier of petroleum gas, coal briquettes, and ferroalloys, and fifth-largest supplier of crude petroleum. That year, Japan was also a significant customer of Russian precious metal ores and critical raw materials for niobium, tantalum, vanadium, and zirconium––key for everything from strengthening steel to powering electronics and supporting nuclear infrastructure.[37] Japan’s reversal of its expansive, years-long economic cooperation plan with Russia, and its willingness to jeopardize its trading relationship with Moscow, is no small feat for this resource-strapped nation.[38] Tokyo’s compliance with Western G7-plus sanctions against Russia underscores the growing strength of its economic security institutions. Reflections The economic security landscape for Japan has changed significantly since 2010. That year, China overtook Japan as the world’s second-largest economy while imposing severe restrictions on Japanese imports of critical rare earth minerals following the Senkaku fishing trawler incident.[39] Japan and China have also tussled at the World Trade Organization over the latter’s import bans on Japanese seafood products.[40] Japan’s response has been to systematically diversify its trading partners, enhance the resilience of its supply chains, and leverage international legal frameworks. As Tokyo continues to navigate the complex realities of an evolving global order, it is imperative for its policymakers to maintain their strategic focus and not to succumb to distractions from domestic politics in either country. The latest example of this, for instance––the recent political furor over the Nippon Steel-U.S. Steel acquisition attempt––does not alter the basic contours of Japan’s relationship to its most important security ally.[41] During the Arab oil embargo of the 1970s, Japan faced far stiffer economic pressure from its Gulf state energy providers to divorce itself from the United States, and Tokyo adroitly managed these difficulties through diplomatic backchannels and market diversification.[42] With its enhanced focus on U.S. alliance integration, domestic defense production, and industrial security reform, Tokyo must continue to do the same while maintaining a more proactive, muscular approach to its international security participation. Elliot Silverberg is a consultant and analyst based in Washington, DC. All views are his own and do not represent the positions of any organization or affiliation. [1] "Full text of Japanese Prime Minister Kishida's speech to U.S. Congress." Nikkei Asia, April 11, 2024. https://asia.nikkei.com/Politics/International-relations/Full-text-of-Japanese-Prime-Minister-Kishida-s-speech-to-U.S.-Congress [2] The White House. "Fact Sheet: Japan Official Visit with State Dinner to the United States." April 10, 2024. https://www.whitehouse.gov/briefing-room/statements-releases/2024/04/10/fact-sheet-japan-official-visit-with-state-dinner-to-the-united-states/ [3] U.S. Department of Defense. "AUKUS Partners Consider Cooperation with Japan." April 8, 2024. https://www.defense.gov/News/News-Stories/Article/Article/3734336/aukus-partners-consider-cooperation-with-japan/ [4] TBS News. "Biden and Japan's Kishida Forge New Partnership Eyeing China and Russia." April 11, 2024. https://www.tbsnews.net/worldbiz/usa/biden-and-japans-kishida-forge-new-partnership-eyeing-china-and-russia-826776 [5] Tokuchi, Hideshi. "The Basic Orientation of Japan's National Security Strategy." Japan Institute of International Affairs (JIIA), June 26, 2023. https://www.jiia.or.jp/en/ajiss_commentary/the-basic-orientation-of-japans-national-security-strategy.html [6] Ministry of Foreign Affairs of Japan (MOFA), "The Free and Open Indo-Pacific Strategy." May 21, 2015. https://www.mofa.go.jp/files/000081298.pdf [7] Ministry of Internal Affairs and Communications, "Press Release: Signing of Memorandum of Cooperation for the Japan-U.S. Cybersecurity Partnership." May 23, 2016. https://www.soumu.go.jp/main_sosiki/joho_tsusin/eng/pressrelease/2016/5/23_01.html [8] Johnson, Jesse. "Japan aims to boost defense spending to 1% of GDP," The Japan Times, April 29, 2024. https://www.japantimes.co.jp/news/2024/04/29/japan/politics/japan-defense-spending-gdp/ [9] Cabinet Secretariat, Government of Japan. "Basic Policies of National Defense Program Guidelines for FY2014 and Beyond" (Tokyo: Cabinet Secretariat, Government of Japan). Accessed May 2, 2024. https://www.cas.go.jp/jp/gaiyou/jimu/pdf/bouei2.pdf [10] Yamaguchi, Mari. "Japan to sell weapons-grade fighter jets for first time." AP News, March 26, 2024. https://apnews.com/article/japan-military-sale-lethal-weapons-fighter-jet-f6d578f8256ec87a44fd86f5240f8c36 [11] Royal Air Force, "UK, Japan, and Italy Sign International Stealth Fighter Jet Programme Treaty." December 14, 2023. https://www.gov.uk/government/news/uk-japan-and-italy-sign-international-stealth-fighter-jet-programme-treaty [12] Harpley, Unshin Lee. "Pentagon, Japan Work Together on Hypersonic Missile Defense." Air and Space Forces, March 20, 2024. https://www.airandspaceforces.com/pentagon-japan-hypersonic-missile-defense/ [13] Ministry of Foreign Affairs of Japan. "Opinion Poll on Japan in Fiscal Year (FY) 2023." 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"Support Rate for Japan Cabinet Rises to 60.1%: Kyodo Poll." March 20, 2022. https://english.kyodonews.net/news/2022/03/65dff5d6bb6c-breaking-news-support-rate-for-japan-cabinet-rises-to-601-kyodo-poll.html [36] "Russia-Japan Trade Turnover Falls by 45.3% in 2023." TASS, January 24, 2024. https://tass.com/economy/1736657 [37] The Observatory of Economic Complexity. "Russia (RUS) and Japan (JPN) Trade." Accessed May 4, 2024. https://oec.world/en/profile/bilateral-country/rus/partner/jpn [38] Corbin, Michael. "The Complete Falling Out of Russian-Japanese Relations." Responsible Statecraft, March 11, 2024. https://responsiblestatecraft.org/japan-russia/ [39] Bradsher, Keith. "Amid Tension, China Blocks Vital Exports to Japan." The New York Times, September 23, 2010. https://www.nytimes.com/2010/09/23/business/global/23rare.html [40] Reuters. "Japan to WTO: China's Fukushima-related Seafood Ban 'Totally Unacceptable'." September 5, 2023. https://www.reuters.com/world/asia-pacific/japan-wto-chinas-fukushima-related-seafood-ban-totally-unacceptable-2023-09-05/ [41] Rappeport, Alan. "Furor Over U.S. Steel Bid Puts Secretive Government Panel In Spotlight." The New York Times, May 3, 2024. https://www.nytimes.com/2024/05/03/us/politics/us-steel-nippon-steel-biden-cfius.html [42] Verrastro, Frank, and Guy Caruso. "The Arab Oil Embargo—40 Years Later." Center for Strategic and International Studies, October 16, 2013. https://www.csis.org/analysis/arab-oil-embargo-40-years-later