Japan's ambassador to Australia has warned of the risks in placing "too many eggs in one basket" with China as he flagged greater investment by Japanese companies in Australian resources such as critical minerals and gas.
Yamagami Shingo, who has been Tokyo's top diplomat in Canberra for more than a year, said Japan sympathised with Australia in the face of a Chinese campaign of economic coercion targeting trades including coal, beef and wine.
Mr Yamagami said Japan had been subject to a similar campaign by its North Asian neighbour 12 years ago when China restricted exports of rare earth materials needed for several high-end manufacturing industries.
He said the episode was the catalyst for Japan's move away from a near-total reliance on Chinese rare earths towards other suppliers, including Australia.
And he noted that the decision had all but underwritten the development of Western Australia's Mount Weld mine, which is operated by local rare earths champion Lynas Corporation.
"Japan succeeded in reducing dependence on Chinese source from almost 90 per cent to 60 per cent," Mr Yamagami said.
"And this is, I think, exactly something that our friends in Australia are learning throughout the recent lessons of wine or coal or barley, timber, lobster… all those products which have been subjected to economic coercion.
"Certainly, we would like to reduce our dependency more, and in that regard, any help coming from Australia would be more than welcome."
Australia 'vital' to hydrogen goal
The comments by Mr Yamagami came during a visit to WA, where Japanese corporations have major investments in industries ranging from coal-fired power, liquefied natural gas and timber farms.
Amid a wholesale push by Japan to develop a "hydrogen economy", Mr Yamagami said Tokyo was betting big that Australia would be crucial to making the ambition a reality.
Much like Japan had bankrolled Australia's iron ore and LNG industries in the 20th century, he said there was every expectation the same would happen with hydrogen.
He said that while the most advanced project between the two countries involved converting coal into hydrogen in Victoria — a so-called brown hydrogen project — there were as many as 20 other projects on the drawing board.
Many of these, he said, would produce fewer or even no emissions by using gas or renewable energy as the feedstock, potentially holding a key to both countries' emissions targets.
"If you are a student of history, throughout human history, eyes of doubt and suspicion have been cast upon the development of, for example, steel, oil, coal, LNG, whatever," he said.
"I firmly believe that hydrogen is the future. This is not in abstract terms. It's in concrete terms.
"For example, with ample land, sunshine and proximity, I think Australia is perfectly placed to be a big exporter to Japan of hydrogen."
Japan open to gas investments
Despite the focus on hydrogen, Mr Yamagami acknowledged Japan would rely on natural gas to help power its $6.6 trillion economy — the world's third-biggest — for many years to come.
He declined to be directly drawn on industry speculation that the massive Browse gas field off WA's north-west coast could be used to backfill the $45 billion Ichthys LNG project owned by Japanese company INPEX.
However, he said the benefits to Japan of stable energy supplies from a country such as Australia were paramount and "it is possible for INPEX to enhance its project in Australia".
"We are not like Russia. We are not like China … we are not running a planned economy," Mr Yamagami said.
"After all, we are living in a market economy in both Japan and Australia. It's up to decision of private corporations.
"But that said, as a government, I would like to see sound and steady development of energy cooperation between Australia and Japan.
China 'driving Australia-Japan ties'
Hayley Channer, a senior policy fellow at the Perth USAsia Centre, said Canberra and Tokyo had grown much closer in recent years, partly thanks to China's increasing belligerence.
Ms Channer noted that while Japan and Australia had long enjoyed close economic ties, those were being expanded to defence and security areas.
As evidence, she singled out the signing earlier this year of a defence pact, which will allow tighter military cooperation between the two countries.
She said the pact, known as the reciprocal access agreement, was historically significant because it was the first time Japan had signed a defence arrangements — a series of multilateral agreements — with any country other than the US since 1945.
"The importance cannot be overstated," Ms Channer said.
"So it's not just seeing itself as being under the US security umbrella."
With COVID and Russia's invasion of Ukraine throwing supply chains into upheaval, Ms Channer said there was impetus for "like-minded" countries such as Japan and Australia to cooperate on trade.
She said China's actions against both countries, as well as Russia' use of energy exports to Europe as an economic weapon, highlighted the need to shore up supplies.
"They do need to work much more closely with one another to identify which things are their priorities," she said.
