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SYDNEY (Reuters) - Japan's most advanced attack submarine will participate in joint military exercises with Australia next month, its Ministry of Defense said, in what analysts see as a bid to win a A$50-billion ($37-billion) defense contract.
The race to build Australia's next submarine fleet has narrowed to France's state-controlled naval contractor DCNS, and Japan's Mitsubishi Heavy Industries and Kawasaki Heavy Industries, touting a variant of their Soryu product.
The Soryu submarine and two military frigates will conduct exercises with the Australian Navy in the seas around Sydney, Japan's Ministry of Defense said in a notice on Thursday, before they return home on April 26, following an 11-day trip.
Australia's defense department confirmed the exercises, but declined to say which vessels would participate.
The 4,000-tonne Soryu faces off against a diesel-electric version of France's 5,000-tonne nuclear-powered Barracuda.
Japan's lobbying effort comes on the heels of a visit last week by French Defense Minister Jean-Yves Le Drian to Adelaide, the home of Australia's ship building industry.
"By bringing the Soryu, it is demonstrating its range and then it gives the Australian navy the chance to exercise with it, including the opportunity to benchmark it against its existing Collins-class submarines," said Euan Graham, director of the international security program at the Lowy Institute.
France is likely to broach its offer to build the new submarine fleet when its largest business grouping, Mouvement des Entreprises de France, visits Australia's capital next week.
Germany's ThyssenKrupp Marine Systems TKAG.DE (TKMS) has lost ground because of technical concerns, several sources said this year.
Australia's fleet of 12 new submarines is a key component of its defense plan. Last month, Australia announced plans to boost its defense spending by nearly A$30 billion ($22 billion) over the next decade, as it looks to protect its strategic and trade interests in the Asia-Pacific region.
Australia is caught in a delicate position, as it is keen to maintain its relationship with both the United States and China, while tension rises between the two over the South China Sea.
"There is an enormous amount of pressure for Australia to go with Japan, because of the message that will send Beijing," said James Curran, professor of foreign policy at the University of Sydney.
($1=1.3389 Australian dollars)
Reporting by Colin Packham in SYDNEY; Additional reporting by Tim Kelly in TOKYO; Editing by Clarence Fernandez