Less than two years after lifting a decades-old ban on arms exports, Japan is navigating one of the most complex and sensitive areas of the defense market: submarines.
The country faces a Nov. 30 deadline to submit a final proposal to Australia for its next-generation submarine, the largest such tender in the world right now. A team of government officials, military officers and corporate executives with no experience in international arms marketing is facing off against global heavyweights ThyssenKrupp AG of Germany and DCNS of France for the 50 billion Australian dollar ($35.5 billion) program.
More than commercial interests are at stake. Winning the race to design and build the subs would cement the "special" relationship Prime Minister Shinzo Abe has sought to build with a fellow U.S. ally against an assertive China. For Australia, cooperating with Japan — whose Soryu is widely seen as the best submarine of its type — risks angering China, its biggest trading partner.
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