Can 'K-Defense' Weather the Warning Signs?

"Japan will join hands with Asian countries that share our values and provide the cooperation our friends need. Japan will take the lead in making this region stronger and more prosperous by pooling our strength."
The May 2 lecture delivered by Japanese Prime Minister Sanae Takaichi at Hanoi National University during her visit to Vietnam was chillingly powerful. She was completely different from her predecessors, who were trapped under the burden of Japan's defeat in World War II and called for peace in ambiguous terms. Takaichi openly targeted China, saying, "We express serious concern over unilateral and coercive attempts to change the status quo in the South China Sea." Put briefly, it was a declaration that Japan had returned as Asia's leading power.
China and others strongly protested, saying that Japan was once again becoming a country capable of waging war. But that is only one side of the story. Takaichi's real objective is the defense industry. Japan's moves since Takaichi's landslide victory in the general election in February make that clear. In late April, her cabinet revised the 'Three Basic Principles on Transfer of Defense Equipment and Technology.' The revision included conditions such as 'if the transfer violates a U.N. Security Council resolution, involves a party to an international dispute, or the equipment is not used for its original purpose,' but it nevertheless allowed Japan to export advanced weapons. Enacted under Prime Minister Shinzō Abe in 2014, the principles had restricted arms exports to noncombat rear-area support, including rescue, transport, security, surveillance and mine-clearing operations. Through the revision, however, Takaichi removed all of those restraints.
This means that K-Defense, which has been raising its profile in global markets, now faces a major challenge. When the Korean War broke out, Japan served as a U.S. logistics base and absorbed virtually all of America's advanced military technology. As the first country in the world to possess aircraft carriers, Japan boasts some of the world's most powerful naval weapons, including the cutting-edge frigates and submarines operated by its Maritime Self-Defense Force.
Even more alarming is Japan's financial power. Since 2023, through its Official Security Assistance (OSA) program, Japan has been providing developing countries' militaries with Japanese defense equipment and related infrastructure free of charge. Takaichi increased this year's budget to ¥18.1 billion, nearly twice last year's amount. This clearly shows that Japan is targeting Asia, including Southeast Asia, where financial resources are limited, rather than Europe or the Middle East, where pressure from war has recently been intensifying.
The first warning lights have come on in the maritime weapons market, including frigates and submarines. Japan is currently pursuing the export and joint development of advanced frigates with the Philippines, while reports have emerged that it is exploring submarine exports to Indonesia. The Philippines is a market where HD Hyundai Heavy Industries has either signed contracts or is pursuing contracts for frigates, corvettes and patrol vessels. Indonesia, meanwhile, is a country with which South Korea has already proceeded with an export contract for FA-50 light attack aircraft, although the deal has been controversial. Japan has also recently provided its used warships free of charge or at extremely low prices. For Southeast Asian countries with limited budgets, Japan is becoming an alternative for strengthening their defense capabilities.
The situation is somewhat better for ground weapons. South Korea still enjoys an overwhelming advantage in combat capability, delivery and operational performance, operating the K9 self-propelled howitzer, K2 main battle tank and K239 Chunmoo. That does not mean there is room for complacency.
The most important point to watch is that Japan has begun taking on America's role in Asia as it counters China's expansion. This means Japanese weapons could become the standard for arms in Asian countries in the future. Japan has already signed co-production agreements with the United States for the Advanced Medium-Range Air-to-Air Missile (AMRAAM) and Patriot (PPAC-3) and is developing them. It has also begun developing a next-generation fighter with the United Kingdom and Italy.
Meanwhile, there is also the regrettable news that South Korea is dragging its feet and has yet to make a decision, mindful of China's reaction, even though a Southeast Asian country has expressed interest in importing advanced ground weapons.
Economic considerations are important in the global defense market, but political and geopolitical factors also come into play. This is especially true in Southeast Asia, which lies close to China. We must bear that in mind. The red light is already flashing. 
[email protected] Kim Gwan-woong Reporter