After asserting global dominance in areas like pop music and fried chicken, South Korea is setting its sights on the arms trade.
Driving the news: South Korean President Lee Jae Myung said that the country will ramp up funding for defence and aerospace research, with the intention of building the world’s fourth-largest defence industry by 2030. Currently, the country ranks 10th in arms exports.
- South Korea, which has a long-standing global reputation for shipbuilding and electronics, has emerged as one of the fastest-growing arms exporters of the past half-decade.
- Case in point: In the first half of this year, its five largest defence companies saw their operating profits jump by a staggering 161.2% on average compared to H1 2024.
Why it matters: Defence spending across the globe is rising concurrently with geopolitical tensions. Yet these same tensions also mean that some nations want to diversify away from traditional suppliers. S.K. promises to be a new, reliable source for Western countries, including Canada.
In Canada: South Korean shipbuilder Hanwha Ocean is one of the final two candidates to supply Canada with new military submarines. If selected, the deal could involve sweeteners like arms from Hanwha’s other subsidiaries and investments in vital Canadian sectors.
- Prime Minister Mark Carney is scheduled to tour Hanwha Ocean’s facilities next week while in South Korea for a meeting of the Asia-Pacific Economic Cooperation.
Bottom line: Global military spending hit over US$2.7 trillion in 2024, a new record that marked the 10th straight year of increases. It’s a record that’s destined to be broken many more times over.—QH