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The Times May 2009:

The huge engineering and technological might of Japan may be poised for a new lease of life as the country prepares to ditch a self-imposed ban on arms exports that was introduced in the mid-1970s.

The controversial decision, which is likely to encounter bitter opposition from the country’s mainly pacifist middle classes, could deliver significant economic benefits to Japan and lead to a realignment in the global defence industry.

A ruling party MP said that the greatest significance would be the conversion of Japan’s robotics industry from civilian to military use as the world’s defence spending is directed to remote-control hardware, such as drone aircraft.

Lifting or toning-down the 33-year old embargo would unleash some of the world’s most advanced heavy engineering companies into the international weapons market, one of the few areas of manufacturing where Japan’s immense technical resources have, for purely political reasons, not produced a dominant global player.

The expected move, which government insiders said may be announced by Taro Aso, the Prime Minister, before the summer, is likely to begin by relaxing the ban to allow Japanese companies to work on joint projects with American and European defence manufacturers, whose products could then be sold internationally.

Joint production and the scope to profit from a share of international sales could draw more Japanese companies into the defence industry and, the Government hopes, bring procurement costs down. Yet as the ban loosens further, government defence insiders say that Japan could be propelled into the top ranks of arms manufacturers.

Mr Aso’s Government, meanwhile, is struggling to reverse an unprecedented shrinkage of the economy while the strong yen has made Japanese goods even less price-competitive against South Korean and Chinese products. Defence analysts have long maintained that Japanese industry, once freed from its ban, could quickly rival British, American and European players. Japan’s prowess in miniaturised motors, robotics and control systems would be especially competitive.