Koizumi tells Japan's arms makers to hold spare wartime capacity as first industry strategy takes shape

Japan's defence minister, Shinjiro Koizumi, has told the country's main weapons makers that the defence industry must be reshaped so that it holds reserve production capacity ready for a military emergency. He made the case on 4 November at a meeting at the Ministry of Defense in Tokyo, held with Economy, Trade and Industry Minister Ryosei Akazawa to shape Japan's first Defense Industrial Base Strategy.

Koizumi said the government aims to adopt the strategy by the end of the year, working alongside Akazawa's ministry. Nikkei reported that it is to be drawn up together with the revision of Japan's three main national security documents planned for December. Five defence contractors, including Mitsubishi Heavy Industries and Kawasaki Heavy Industries, attended, along with the Keidanren business federation and the Japan Chamber of Commerce and Industry.

Koizumi argued that past government support had mainly aimed to restore and keep a stable flow of equipment in peacetime. Pointing to Russia's war in Ukraine, now in its fifth year, he said the value of being able to sustain a long fight had become obvious, that production and technology now feed directly into deterrence, and that carrying on with existing measures would not be enough.

To build that spare capacity, Koizumi pointed to state funding for higher output and to a government-owned, contractor-operated model, under which the state owns factories and private companies run them, according to Kyodo. The Diplomat noted that a 2023 law on the defence production base already lets the government buy manufacturing facilities and hand their operation to companies when supplies cannot otherwise be secured.

Exports are a central part of the plan. Koizumi said that winning overseas demand is essential if Japan is to have production capacity that works as a deterrent, and that equipment should be designed and built with foreign markets in mind. FNN reported that he wants a dual-use base that serves civilian and overseas buyers in peacetime and can be switched to the needs of the Self-Defense Forces in an emergency, and that he pledged support for small and medium-sized suppliers to widen the supply chain.

Koizumi also said the government is considering a new incorporated administrative agency to tie the state more closely to defence companies. The ministry told TBS it aims to launch the body in the next fiscal year. The Diplomat reported that it would back domestic production, research, equipment transfers abroad and dual-use start-ups, with legislation expected in the 2027 ordinary Diet session.

Kyodo reported that Koizumi called for a fundamental rethink of how equipment policy is made and run, and for faster adoption of new ways of fighting that use small drones and artificial intelligence, alongside the ability to sustain long operations.

Akazawa said a strong defence industrial base needs the public and private sectors to work together. He said his ministry would help defence firms expand their supply chains and find customers abroad, and that defence research can spin off civilian products while civilian technology can be brought into defence. He added that he wants defence work to be seen as profitable and honourable for companies.

The push comes as Tokyo weighs a much larger defence plan. The current buildup programme sets aside about 43 trillion yen for the five years to fiscal 2027, and Reuters has reported that the government is considering 70 to 80 trillion yen for the following five years, though no decision has been made. The Diplomat also noted that the Finance Ministry warned on 5 November against paying for higher defence spending with new government bonds.

The Diplomat argued that a conflict in the Taiwan Strait or around Japan's southwestern islands could require long operations over great maritime distances, straining ammunition stocks, repairs and resupply. It said the hardest question for the strategy is who pays to keep production lines ready when peacetime orders cannot support them, a cost that could fall largely on taxpayers.