Japan is investing a significant sum into its shipbuilding sector to regain strategic control. However, analysts caution that capital alone will not overcome challenges from China, labor shortages, and high costs.

Japan is forging ahead with an investment plan that could see as much as 1 trillion yen (US$6.3 billion) pumped into its shipbuilding sector as it tries to wrest back greater control of a key strategic industry. However, analysts said money alone would not be enough to restore Japan’s former standing in a sector now dominated by China, with higher costs, labour shortages and years of lost capacity all standing in the way. The effort has taken on greater urgency as turmoil in the Middle East has....