The concept of 'weaponized interdependence,' highlighted by China's use of export controls, is driving Asian nations like Japan, India, and South Korea to implement economic security acts. This shifts investment toward domestic supply chains in critical minerals, semiconductors, and defense, creating state-backed opportunities.

A METI official outlines a philosophy of 'peace through economic strength.' The objective is not to develop economic statecraft to weaken adversaries, but rather to enhance Japan's own technological superiority and supply chain autonomy. This strength, they believe, enables Japan to maintain better relationships and engage more freely in the global market.

Unlike military intelligence, the information needed for economic security—identifying strategic sectors and necessary actions—comes from businesses, researchers, and academia. Recognizing this, Japan's METI is building a global 'community' to ensure a flow of high-quality, real-world intelligence to inform its policies, as this expertise is not found inside government.

A U.S. national security document's phrase, "the future belongs to makers," signals a significant policy shift. Credit and tax incentives will likely be redirected from financial engineering (e.g., leveraged buyouts in private equity) to tangible industrial production in order to build resilient, non-Chinese supply chains.

Under 'Sanae-nomics,' Japan's growth strategy is pivoting towards sectors linked to national security. This includes not only defense and heavy industries but also advanced technology like AI, robotics, and quantum computing, as well as energy and food security. These areas are expected to be core beneficiaries of the new administration's industrial policy.

For years, Japan was a value trap: cheap companies with poor governance hoarded cash. The game changed when Prime Minister Shinzo Abe introduced stewardship and governance codes, creating a top-down, government-backed catalyst for companies to finally improve capital allocation and unlock shareholder value.

In an era of financial repression and heavy government intervention, the most effective investment strategy is to identify sectors receiving direct government support. By positioning capital near these "money spigots," investors can benefit from policies designed to manage the economy, regardless of traditional market fundamentals.

To gain corporate buy-in for its security agenda, Japan's government combines protective measures like export controls with promotional incentives like R&D support. This 'run faster' strategy reframes national security regulations from being a restrictive cost into a direct opportunity for innovation and expansion in strategic sectors.

Japan's Ministry of Economy, Trade and Industry (METI) defines its economic security strategy through two core pillars. 'Strategic indispensability' means possessing superior, leverageable technology that others need. 'Autonomy' refers to having resilient supply chains for critical goods like energy and food. This dual framework guides their national policy.