Japan’s arms export shift set to intensify naval shipbuilding rivalry with Korea

German Defence Minister Boris Pistorius, second from right, shakes hands with Japanese Defense Minister Shinjiro Koizumi in front of the JS Teruzuki destroyer at the Japan Maritime Self-Defense Force's Yokosuka Naval Base, March 22. AP-Yonhap

By Lee Min-hyung

• Published Apr 28, 2026 1:00 AM KST

Seoul still has competitive edge in ground weapon systems

Japan’s decision to lift decadeslong restrictions on arms exports is expected to intensify competition with Korea, particularly in the global naval shipbuilding industry, experts and industry officials said Monday.

The move marks a significant policy shift, coming more than six decades after Tokyo imposed strict limits on overseas weapons sales following its World War II defeat in 1945.

Defense experts said Japanese shipbuilders are poised to emerge as formidable contenders against Korean counterparts such as HD Hyundai Heavy Industries and Hanwha Ocean, both of which must brace for tougher competition in overseas 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,” said Yang Uk, a research fellow at the Asan Institute for Policy Studies.

Yang added that Japan’s recent successful bid for Australia’s next-generation multirole frigate program underscores its enduring competitiveness in advanced naval platforms.

Tokyo’s Mitsubishi Heavy Industries was selected as the final contractor for the SEA 3000 project, reaffirming Japan’s technological credibility among developed nations.

Japan’s manufacturing prowess, which rivals or even exceeds that of Korea in certain sectors, could enable it to expand exports of advanced military systems in naval and other areas. Key examples include the P-1 maritime patrol aircraft and the Taigei-class diesel-electric submarines.

However, other experts said Japan’s easing of arms exports rules will not pose any immediate threat to Korean defense players, as Tokyo has focused mostly on supplying defense products to its Self-Defense Forces.

The lack of extensive experience in mass production for global markets could undermine Japanese defense firms’ price competitiveness, they added.

“Japan does not yet have sufficient capacity to aggressively pursue overseas exports, given its reliance on domestic orders from its Self-Defense Forces,” said Kim Dae-young, a military commentator.

“My view is that Tokyo's recent policy shift will not pose any short-term threats to most Korean defense players. It also remains uncertain whether Japanese companies can develop platforms tailored to the needs of other countries, particularly in Southeast Asia.”

He pointed out that many Japanese defense systems have traditionally been designed with domestic requirements in mind, raising questions about their adaptability and export diversification.

By contrast, Seoul has built a strong competitive edge in land-based defense systems, supported by continuous production and upgrades amid security threats from Pyongyang. This has enabled South Korean firms to achieve economies of scale and offer more cost-effective defense solutions.

“Compared with Japan, which has focused on limited domestic production, Korea has consistently manufactured and improved weapons systems for global markets, ranging from tanks to ammunition,” an industry official said.

The official added that Japan’s policy shift will have a limited impact on Korea’s dominance in ground weapons exports, including tanks and self-propelled howitzers, but the naval sector is likely to emerge as a key battleground, with both countries vying for a larger share in the global defense market.