Australia snubbed a bid from Japan to award one of the world’s biggest defence deals to France’s DCNS Group, opting for a contract that will generate jobs in Australia and minimize a backlash from its major trading partner China.
The French offer for the A$50 billion ($39 billion) contract to build 12 submarines trumped those by Japan’s Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd., and Thyssenkrupp AG of Germany.
DCNS will build the fleet in Adelaide and the project should create about 2,800 jobs, a point Prime Minister Malcolm Turnbull made in announcing the winner Tuesday ahead of an election expected in July.
The outcome is a double loss for Japan, which saw the contract as a step toward opening up its defence industry two years after the government lifted a decades-old ban on arms exports. Prime Minister Shinzo Abe has also sought to boost ties with Australia, a fellow US ally, as China asserts its military ambitions in the region.
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