Japan has eased weapons export restrictions for the first time in more than four decades as part of a major arms transfer policy overhaul announced on Tuesday.
However, in line with its constitution, the Japanese government said the country will focus on such developments that serve international peace and Japan’s security.
It is believed Japan will concentrate on development, production and export of patrol ships, mine detectors and other non-lethal equipment and doesn’t have any interest in exporting fighter jets or tanks
"This is beneficial for Japanese companies in that they can take part in joint development and joint production and have access to cutting-edge technology," said Takushoku University Professor Heigo Sato.
"If you live in a closed market like the Japanese defence industry does, you clearly lag behind in technological development."
The decision, announced by Japanese Prime Minister Shinzo Abe, presented as an attempt to foster Japan’s ties with allies and boost domestic defence industry, has raised concerns in Japan’s archival country China as it comes in a time of rising tension in the East China Sea spurred by a dispute over a group of islands.
Japan has respected a self-imposed arms export ban formed in 1967 as part of its pacifist post-war constitution. Though several exceptions have been made over the years, the principles forming the basis of the restrictions have prohibited Japan from selling military equipment to communist countries as well as those involved in international conflicts.
This ban has virtually excluded defence contractors such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries and IHI from the overseas market and made it difficult for them to cut costs and keep abreast of technological development.
Japan's defence budget slipped for a decade through 2012, raising concerns that some of the smaller and less diversified arms makers might be forced to go out of business.
The new export policy alone will unlikely help Japanese defence makers establish a big presence overseas, although some high-performance Japanese components, such as diesel engines for ships, stand out among potential competitors.
"It's not as if Japanese (defence) goods will start selling right away because of this. The government still needs to play a leading role in their overseas expansion. Various governments are already competing fiercely out there," said Bonji Ohara, research fellow at the Tokyo Foundation, a think tank.
"Competition dictates prices. Of course, they cannot set the kind of prices they are setting for the domestic market," said Ohara, who once served as a Japanese navy attache in China.
One of Japan's potential defence gear exports is Kawasaki Heavy's submarine diesel engines, which do not require air and allows submarines to stay submerged for an extended period.