00:00Recently, a story has started circulating in the defense industry.
00:02People are saying they're concerned about Japan's arms exports.
00:05Recently, Japan approved the export of lethal weapons officially entering the defense market.
00:08As a result, there are predictions that this could become a major obstacle for Korea's defense industry.
00:12Today, let's take a look at this.
00:14Let's take a look right away.
00:15Prime Minister Takechi, using his overwhelming general election victory as a stepping stone,
00:18has gained full control over state affairs and is showing bold moves,
00:21even attempting to revise the peace constitution.
00:23Based on this political foundation, the Japanese government has eased weapons export regulations
00:26to an unprecedented level.
00:28Until now, Japan has strictly limited the scope of weapons exports to just five purposes.
00:32Rescue, transport, surveillance, warning, and minesweeping.
00:34However, Prime Minister Takechi has completely abolished these five categories,
00:37opening the way for Japan to export equipment with lethal capabilities overseas.
00:40With the revision of the operational guidelines for the three principles on transfer of defense
00:44equipment at the National Security Council presided over by Prime Minister Takechi,
00:47Japan's weapons systems are now facing a major transformation.
00:50Under this amendment, even if a country is engaged in combat, as long as certain conditions are met,
00:54a pathway has been established to export weapons.
00:56In effect, the barrier that block weapon exports has disappeared.
00:59The Japanese government has decided to clearly distinguish and manage equipment as either
01:02weapons or non-weapons.
01:04Equipment that can directly attack the enemy, such as fighter jets or submarines, is classified
01:07as weapons, while auxiliary equipment without lethal functions, like radars or radios,
01:11is defined as non-weapon.
01:12Country eligible to import weapons are currently set at 17, including the United States,
01:16the United Kingdom, and Australia, which have signed defense equipment transfer agreements.
01:19If countries currently under discussion join, this number is expected to soon expand to 20.
01:23On the other hand, non-weapon equipment can now be exported to any country in the world
01:27without significant restrictions.
01:28Defense Minister Koizumi Shinjiro emphasized that there is already considerable interest
01:31and expectation from countries around the world regarding Japan's defense equipment.
01:34In fact, it is known that the Philippines is actively seeking to acquire Japanese-made
01:37frigates, and Indonesia is showing strong interest in introducing Japanese submarines,
01:41causing significant shifts in the market landscape.
01:43The problem is that there are predictions that the country most likely to suffer from this
01:46could be Korea.
01:47Within 15 days of the lifting of the arms export ban, Defense Minister Koizumi Shinjiro
01:51visited Indonesia and the Philippines in quick succession.
01:54However, the biggest problem is that the countries Japan is targeting first, such as Indonesia
01:58and the Philippines, overlap with the countries to which Korea is exporting defense weapons.
02:03Japan has already approached Indonesia about exporting Oyashio-class submarines, and it has
02:08announced that it is pushing to transfer the soon-to-be-retired Abukuma-class escort destroyers
02:12to the Philippines.
02:13Prime Minister Takeelchi also personally showed his support.
02:16On May 8, he visited Vietnam, met with Prime Minister Le Minh Hong, and discussed ways
02:21to cooperate on defense and security.
02:23Japan's bold moves are signaling an inevitable head-to-head competition with South Korea
02:26in the global defense industry market.
02:28The Southeast Asian region, which has been a key export hub for our defense industry,
02:31is now very likely to become a major battleground between South Korea and Japan.
02:35Indonesia is a prime example, as it has already imported Jangbogo-class submarines and KF-21
02:40fighter jets from our country, maintaining a close, cooperative relationship.
02:44Of course, there have been serious tensions, such as the issue of unpaid contributions and
02:47controversies over technology leaks, which have sometimes shaken the relationship, but
02:51it is clear that Indonesia is still a major partner for South Korea.
02:54But Japan is now taking advantage of this gap and making a strong bid to enter the Indonesian
02:58market.
02:58The fact that the Japanese government has started to sway Indonesia by offering unprecedented
03:02financial support for the sale of used submarines is a very threatening sign for
03:05us.
03:06The situation in the Philippine market is also becoming urgent.
03:09HD Hyundai Heavy Industries has achieved remarkable results by winning orders for 12 vessels in the
03:13Philippines since 2016, and Hanwha Ocean is also focusing all of its capabilities on winning
03:18the Philippine submarine project.
03:19However, as Japan strengthens its defense cooperation with the Philippines and agrees to
03:23transfer the soon-to-be-retired Abukuma-class escort destroyer, fierce competition with our
03:26companies aiming for new vessel orders has become inevitable.
03:29The future competition anticipated in the aviation sector is even bigger and more intense.
03:33Japan is currently putting everything on the line for the GCAP project, a 6th generation,
03:36next-generation stealth fighter, in partnership with the UK and Italy, aiming for deployment
03:40in 2035.
03:41For now, our KF-21, which is a 4.5 generation fighter, differs in class and development timeline,
03:47so it may not be a direct comparison.
03:48However, we need to pay attention to the fact that Japan is openly targeting Australia,
03:52India, and ASEAN countries as potential buyers for this next-generation fighter.
03:55The 6th generation fighter is a key weapon for future battlefields, equipped with artificial
03:59intelligence and the ability to coordinate with unmanned aircraft.
04:01If Japan tries to dominate the skies of the Asia-Pacific region with overwhelming technological
04:05power, the future prospects of our defense industry could also suffer significant damage.
04:08Of course.
04:09Right now, Korea ranks 4th in the global defense industry market, while Japan doesn't even
04:13make it into the top 30 and doesn't have a high market share.
04:15However, the reason industry insiders are nervous is because Japan's potential cannot
04:19be ignored.
04:19For example, Japan is already strong in the maritime sector, and it is a country with excellent
04:23missile and air force capabilities.
04:25For instance, on April 18, Australia signed a contract with Mitsubishi Heavy Industries to
04:29purchase Mogami-class frigates worth $7 billion, which is about $10.338 trillion won, and
04:34New Zealand is also considering purchasing these Mogami-class frigates.
04:37The country that competed for this deal was Korea.
04:39It seems that Japan beating Korea to win Australia's next-generation frigate project was quite a shock
04:44for Korea.
04:44It's also a signal that a strong competitor has emerged in the naval sector.
04:48On top of that, Japan has enormous financial power.
04:51In 2023, as part of its foreign aid, it established the Official Security Assistance Fund and began
04:55donating weapons to various ASEAN countries.
04:58This Official Security Assistance Fund is called OSA.
05:00Japan increased the OSA Fund budget by 125% compared to last year.
05:04They increased it tremendously.
05:06If Japan uses OSA and low-interest loans together, it's highly likely that Korea's price
05:10competitiveness will be undermined.
05:12Therefore, Korea has no choice but to compete.
05:14Attention is being paid to the possibility that Japan's strategy of free aid could lead to long-term
05:18market dominance in the future.
05:20Defense equipment isn't something you just buy once, and that's it.
05:23Since maintenance, repairs, and follow-up logistics support continue for decades, initial support
05:27also affects long-term contract competition.
05:29Therefore, from the perspective of Southeast Asian countries, the Japanese OSA is quite
05:34attractive because it allows them to introduce equipment without any initial cost burden.
05:38Once they adopt the Japanese system, the Korean defense industry predicts that it's highly
05:41likely this will lead to ongoing maintenance, parts, and additional equipment purchases.
05:45Because of this, Korea also needs to respond to Japan's entry into the defense market.
05:50Japan's OSA is extremely powerful.
05:52It seems that the Korean government also needs to respond.
05:55Right now, Japan has twice as many defense attaches dispatched to the Southeast Asian
05:59region as Korea does.
06:01And since Japan has built a solid network through long-term ODA, we need a way to break through
06:05this.
06:06And there are also opinions that, like China, Turkey, and Europe, where the state guarantees
06:10defense exports, Korea should also enhance its price competitiveness through low interest
06:14rates and substantial loan guarantees.
06:15And the United States is currently demanding the growth of Japan's defense industry.
06:19Right now, as the U.S. supports two wars simultaneously in Ukraine and the Middle East, its
06:23ammunition and missile stockpiles are running dangerously low, leading to a serious depletion
06:27of resources.
06:28With the U.S. manufacturing base no longer what it used to be, even though it was once
06:31called the factory of the world, Japan is seizing this opportunity and trying to perfectly
06:34fill the gap left by the U.S.
06:36In fact, Japan is taking a bold step by producing Patriot missiles domestically through cooperation
06:40with the United States and then exporting them back to the U.S.
06:43They've even started mass-producing attack drones, which have emerged as game changers on
06:46the modern battlefield on joint Japan-U.S. production line.
06:49This could become the most painful scenario for South Korea's defense industry.
06:52The fact that the United States is siding with Japan and starting to trust Japan's manufacturing
06:56capabilities suggests that the leadership of the global defense supply chain could rapidly
06:59shift to Japan in the future.
07:00If weapons produced in Japan are distributed to allied countries around the world under
07:04the American logo, the opportunities for South Korea's defense industry, which needs
07:07to develop its own brand to break into the market, will become even more limited.
07:10Japan, now backed not only by its technological capabilities, but also by the enormous support
07:14and diplomatic influence of the United States, will increasingly encroach on the market.
07:18This is not just a matter of fair competition between companies, but a massive battle over
07:22geopolitical alignment between nations and it will be a critical turning point that determines
07:25the fate of our security and economy.
07:27We must remember that if Japan becomes firmly established as America's arsenal in Asia,
07:31the defense export foundation we have painstakingly built could be shaken in an instant.
07:35Japan's cunning and meticulous defense industry strategy is ultimately becoming the sharpest
07:39sphere pointed at Korea.
07:40We must not only excel at making weapons, but also immediately come up with sophisticated
07:44political and strategic solutions that will allow us to survive amid the pressure of the
07:47US-Japan alliance.
07:49If we don't, even though Korea's defense industry may seem to be doing well right now,
07:52we might eventually see our market share gradually taken away by Japan.
07:55So it's not too late even now, and I think we need to show that we are quickly establishing
07:59and implementing policies.
08:01The defense industry isn't just about selling weapons as products, it's a highly political
08:05act that involves selling trust and the depth of alliances between countries.
08:08If we focus only on technology and cost effectiveness and neglect policy support and diplomatic networks,
08:13we might not be able to withstand Japan's aggressive tactics.
08:15Therefore, I think it's time for the private and military sectors to come together and create
08:19proper policies.
Comments