Experts and industry officials stated that Japan's recent move to remove longstanding limitations on arms exports is anticipated to heighten competitive pressures with South Korea, especially within the international naval shipbuilding sector.
This action represents a substantial alteration in policy, occurring over sixty years after Tokyo established stringent restrictions on international arms exports subsequent to its defeat in World War II in 1945.
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Defense analysts have indicated that Japanese shipbuilding companies are positioned to become strong competitors against their Korean counterparts, such as HD Hyundai Heavy Industries and Hanwha Ocean.
These Korean firms must prepare for heightened competition in securing international naval contracts.
“In Southeast Asia, Japan is widely regarded as a more reliable partner than Korea due to the former’s long-standing engagement through official development assistance, which could translate into stronger naval export opportunities,” says Yang Uk, a research fellow at the Asan Institute for Policy Studies.
Yang noted that Japan's recent triumph in securing the contract for Australia's next-generation multirole frigate program highlights its sustained competitiveness in the field of advanced naval platforms.
Tokyo-based Mitsubishi Heavy Industries has been appointed as the ultimate contractor for the SEA 3000 initiative, thereby reinforcing Japan's technological reputation among advanced countries.
Japan's exceptional manufacturing capabilities, on par with or surpassing those of Korea in specific domains, present an opportunity for the nation to augment its exports of sophisticated military systems, particularly in naval and other sectors. Notable instances of such advanced systems include the P-1 maritime patrol aircraft and the Taigei-class diesel-electric submarines.
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Nevertheless, some experts argue that Japan's relaxation of arms export regulations is unlikely to pose an immediate threat to Korean defense companies, as Tokyo has concentrated primarily on providing defense equipment to its own Self-Defense Forces. They indicated that the limited breadth of experience in large-scale production for international markets might compromise the cost-effectiveness of Japanese defense companies.
“Japan does not yet have sufficient capacity to aggressively pursue overseas exports, given its reliance on domestic orders from its Self-Defense Forces,” says Kim Dae-young, a military commentator.
He noted that a significant number of Japanese defense systems have historically been developed with a focus on domestic needs, which prompts inquiries regarding their flexibility and potential for export expansion.
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In comparison, Seoul has developed a robust competitive advantage in ground-based defense systems, facilitated by ongoing production and enhancements in response to security challenges posed by Pyongyang. This strategic focus has allowed South Korean companies to attain economies of scale, thereby providing more economically efficient defense solutions.
The representative mentioned that the change in Japan’s policy is expected to exert minimal influence on Korea’s leadership in the exportation of land-based military equipment, such as tanks and self-propelled artillery. However, the maritime arena is anticipated to become a significant area of competition, as both nations are likely to compete intensively for a greater portion of the international defense market.