May 12, 2025
UK similarities: There are notable likenesses between the two countries. Consider the following: one of Japan’s central strategic goals is ‘ensuring economic security’. It imports a huge amount. It is a maritime nation. It is a ‘middle power’ (meaning it has clout and influence, but lacks the means to enact change to the international system through the use of hard power). It relies on free and open shipping lanes for survival. Its alliance with the US is important for its security. In all these aspects, it’s actually very similar to the UK. It’s worth thinking about the strategic challenges facing Japan to get a new perspective on where we are as a country.
Japanese investment in the UK: UK-Japan relations are strong at the moment.
- It was announced a few weeks ago that Japanese property group Mitsui Fudosan has invested £1.1 billion into the British Library, allowing it to expand.
- In 2023, Marubeni agreed to invest £10 billion into UK offshore wine and green hydrogen projects.
- In May 2024, Sumitomo Electric Ltd started construction on a £350 million undersea cable factory at the Port of Nigg in Scotland.
- In January this year, a £50 million investment deal between Nissan, Japan Automatic Transmission Company (JATCO), and the UK government was announced for the construction of a new motor manufacturing site in Sunderland.
Deep-sea mining: This is not something discussed much currently, and it combines two topics of strategic importance: critical minerals and maritime sovereignty/security. Deep-sea mining is a nascent industry, and there are major environmental concerns surrounding it, but it’s increasingly attracting more attention. Estimates suggest the ocean floor contains more rare earth elements than all land-based reserves combined.
Resource nationalism and economic coercion are major issues for all net mineral importers. Japan is the world’s biggest critical mineral importer. The UK, too, is almost entirely reliant on imports for critical minerals. For both island nations, this is a significant issue for current and future national security. Japan has found large deposits of minerals on the seabed under its territorial waters in the East China Sea. This will likely become a geopolitical issue in future, if technology can be developed to mitigate major environmental damage during extraction. Watch this space.
Risk horizon – During Blackthorn’s most recent long-term project for Lloyd’s, in which we developed civil unrest disaster scenarios triggered by a natural catastrophe, we consulted seismological and disaster response experts in the US. They told us that Japan knew that an earthquake as catastrophic as the 2011 Tohoku one could happen, and this was considered a 1-in-1,000-year occurrence. The Fukushima nuclear plant was built to only withstand a 1-in-100-year event, though.
It’s worth thinking about what low-frequency disasters, natural or human-made, could occur in the UK (or affecting the UK), that could precipitate a major economic and even geopolitical shift. We’ve relatively recently experienced Brexit and Covid, so and thinking creatively will likely prove a useful skill going forward. The US lurch to isolationism under Trump is already having major economic and geopolitical repercussions – tariffs and support for Ukraine, for example – so it’s worth considering what crises could come to pass in the next 5-10 years?
