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#Military: Will South Korea become the world's fourth largest arms exporter?

Despite the growth of the war economy over the past 40 years, "in terms of production strength, it cannot cover the limit of South Korea's insufficient military research capabilities," say Chinese military experts.

South Korea plans to invest 400 billion won ($289 million) within the year in research and development of advanced materials and components for defense products to strengthen the competitiveness of the country's military industry, the Yonhap news agency reported April 17.

A South Korean Marine amphibious landing vehicle transits through the small surf zone off of Tok Sok Ri beach in South Korea during bilateral amphibious training operations. Photo GettyImages.

Since November 2022, when South Korea's Ministry of National Defense proposed the goal of making South Korea the fourth largest arms exporter by 2027, South Korean President Yun Seok-yeol has reiterated this goal on several occasions.

Will South Korea's military industry and arms exports be able to maintain the high growth rate of recent years as hoped?

"Autonomous national defense" has been very effective

According to the Stockholm International Peace Research Institute (SIPRI) in Sweden, South Korea ranks ninth in the world in terms of total arms exports from 2018 to 2022 and sets a new record of $17.3 billion in arms exports in 2022.

In these five years, South Korea accounted for only 2.4 percent of the global market share of arms exports, but grew 74 percent over the previous five years. This is the highest growth rate among the world's top 10 arms exporters.

In the 1970s, with a solid economic and industrial foundation, South Korea began to implement a policy of "independent national defense".

The National Defense Science Research Institute, affiliated with the Ministry of National Defense of South Korea, was founded in August 1970. It was the country's first full-time military research institute, playing a leading role in the development of the military industry. South Korean.

Since then, the country's military industry has made great strides.

In the 1970s it achieved localization of most small arms and began exporting armaments. In the 80s and 90s the military industry was able to assemble and even develop heavy equipment.

After entering the 21st century, the Dokdo-class amphibious assault ships, KDX series destroyers, etc. were equipped with troops one after another, and the main battle tanks of the K2 series, self-propelled K9. howitzers, etc. have gained a foothold in the international arms market.

In 2022, the next-generation Aegis destroyer Jeongjo Daewang was launched, and the new KF-21 stealth fighter completed its test flight.

Currently, the systematization of South Korea's military industry has reached a certain level, with a relatively complete range of categories. It can produce aircraft, ships, armored vehicles, missiles, heavy artillery, small arms and ammunition and other self-sustaining equipment in conventional weapons, and has the market competitiveness for batch exports.

Large companies like Samsung and Hyundai are deeply involved in the military industry. The Hanwha Group, formed after a series of sales, mergers, acquisitions and reorganizations, is a representative of South Korean military industrial enterprises and is considered the Korean version of Lockheed Martin.

Arms exports are expected to grow

Recently the South Korean government and military industry companies have made a lot of noise in the field of arms sales.

In April, South Korea's Industry Minister Ahn Ahn-Kan visited the headquarters of the Korea Aerospace Industries Corporation and expressed hope that "the defense industry will become a major new export field."

In November 2023, Kim Seung-won, executive vice president of Hanwha Aerospace, said in a media interview that he was fully confident in achieving the goals set by the government.

In December of the same year, Yin Xiyue inspected the headquarters of Hanwha Group, attending the defense export strategy meeting with the presence of the government, military and private enterprises.

He left a message, saying he supported the bold challenge of the Korean defense industry.

Analysts have pointed out that South Korea's rapid growth in arms exports is mainly due to four main advantages: quick delivery; manufacturing strength; strong government support; and lower unit cost and selling price to meet customer demand for a large number of military products.

The so-called "Ukraine effect" also plays an important "helping hand": in the face of the Russian-Ukrainian conflict, many European NATO countries, due to pressures on the security of military procurement, to replenish the position of traditional Western military power, began to purchase weapons from third countries as their production capacity has been greatly reduced.

The use of Western standards and the ability to quickly supply large quantities of South Korea's military products make it easy to bridge this gap.

This agreement is just one part of another, much larger one, which provides for a total of $22 billion for the cumulative export of 672 K9 self-propelled howitzers and 288 K239 multiple rocket launchers to several European countries; making it the largest arms export contract ever signed by South Korea by dollar amount.

Previously, the Polish government had declared that it wanted to build "the strongest army in Europe" and expressed interest in purchasing 980 K2-series main battle tanks, 648 K9 self-propelled howitzers and 48 F/A-50 light fighters, among others. As long as these large orders are fulfilled, along with new orders from Saudi Arabia and other Middle Eastern countries (e.g., a $3.2 billion order for anti-aircraft missiles from Saudi Arabia to South Korea in 2022), a significant portion of South Korea's arms exports will have already been "pocketed."

There are bottlenecks in development

The South Korean government is promoting the expansion of the arms trade, as well as stimulating the economy and increasing support for the right-wing ruling party.

However, it is not easy for South Korea to become the fourth largest arms exporter.

Analysts believe that of the four main advantages of South Korea's military industry, only two are actually truly reliable: "sufficient quantity, fast delivery" and "Western military standards, Eastern selling prices".

Although the South Korean government spares no effort to support military industrial enterprises, it is limited by loan quotas.

British Reuters commented that South Korea's weapons can open up the market of some "strongly willing but cash-strapped" countries, and a key factor is providing large loans to these buyers. However, under current Korean law, a single loan from the Export-Import Bank of Korea to any borrower must not exceed 40% of its total capital (about 15 trillion won), or about 6 trillion won.

However, the orders and ordinances signed by South Korea and European countries, especially Poland, are worth tens of billions of dollars. Furthermore, South Korea extended loans of around 6 trillion won during the implementation of the first phase of the agreement with Poland, leaving almost no room for further loans.

Even if an exception is made recklessly and the "green light" is given, it will put strong pressure on the Bank of Korea.

As for the manufacturing force, it cannot cover the limit of South Korea's insufficient military research capabilities, Chinese military experts say.

"In aerospace and other fields, South Korea still lacks advanced technologies with independent intellectual property rights. Many weapons and equipment are still largely "assembled products" and their overall performance needs to be tested highly dependent on imports and equipment production and export licenses are limited. Therefore, in recent years, although South Korea has focused on military aircraft sales, its arms exports are still mainly land combat equipment and other traditional military industrial powers revitalize their manufacturing capacity, South Korea may return to its secondary role of “filling the gaps” of the United States and Europe in the international arms market."

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