Under new circumstances, South Korea may once again “anchor” its shipbuilding industry as one of the core assets of national competitiveness, attempting to reshape the industrial ecosystem through national strategy.
Lee Jae-myung’s campaign pledges elevated the shipbuilding industry to an unprecedented strategic level, signaling a shift in the South Korean government’s role from a relatively passive “guardian” to a proactive industrial promoter.
Even if the new South Korean government demonstrates strong determination to advance industrial policies, its implementation will still face constraints from multiple internal and external systemic factors.
South Korean shipbuilders may collaborate with the U.S. to construct military or commercial vessels, partially filling gaps in the American shipbuilding industry.
In recent years, driven by factors such as energy transition, the green and low-carbon wave, and geopolitical restructuring, the global shipbuilding market has entered a new cycle of structural adjustment. Facing increasingly fierce international competition, South Korea’s newly elected President Lee Jae-myung made the rare move during his campaign of elevating the shipbuilding industry to a strategic cornerstone of the country’s new national vision, the “K-Initiative.” He explicitly proposed a government-led approach to “build a maritime powerhouse through K-Shipbuilding.” This not only reflects the new administration’s heightened focus on revitalizing the manufacturing base but also signals potential systemic adjustments in industrial policy.
With Lee Jae-myung’s administration taking office, a series of initiatives in the shipbuilding sector have gradually emerged: strengthening strategic cooperation with the U.S., emphasizing the future competitiveness of smart and green vessels, and advocating for a publicly led industrial support system. These policy inclinations suggest that South Korea may reposition shipbuilding as a core asset of national competitiveness under new circumstances, seeking to reshape the industrial ecosystem through national strategy. These measures will have profound implications for the competitive landscape between Chinese and South Korean shipbuilding industries.
**Campaign Pledges to Revitalize Shipbuilding**
During the presidential campaign, major candidates vied for voter support by playing the “shipbuilding card,” making ambitious promises for the industry. This campaign atmosphere reflects a consensus among South Korea’s political elite: against the backdrop of intensifying global shipbuilding competition, revitalizing the industry has become a key lever for gaining public support and restoring economic confidence.
Kim Moon-soo, the People Power Party candidate, praised HD Hyundai Heavy Industries’ world-class status while campaigning in Ulsan, highlighting South Korea’s capability to build warships and submarines for the U.S. He pledged to promote nuclear-powered submarine construction and develop a “K-Defense” industry centered on HD Hyundai Heavy Industries if elected.
Lee Jae-myung, the Democratic Party candidate, elevated shipbuilding to a national strategic level, proposing a vision to “build a maritime powerhouse through K-Shipbuilding” and positioning it as a core asset of South Korea’s new national vision. His campaign platform outlined a series of policy commitments aimed at advancing the industry, with the core goal of transforming South Korea from a shipbuilding powerhouse into a global maritime leader.
Lee emphasized the critical role of shipbuilding in exports and employment, pledging five strategic initiatives to achieve this goal if elected: capturing the smart and eco-friendly future vessel market, supporting emerging sectors like wind turbine installation vessels under the “Energy Highway” initiative, advancing high-end shipbuilding systems, enhancing the competitiveness of small and medium-sized shipbuilders, leading in specialized vessel construction technology, and fostering the ship maintenance, repair, and overhaul (MRO) industry.
Lee advocated for strong support for R&D in eco-friendly fuel-powered vessels, promoting the demonstration and commercialization of autonomous smart ships to dominate the future smart shipping market. He also pledged to address financing challenges, urging banks to provide timely refund guarantees (RGs) and expanding guarantees from the Korea Trade Insurance Corporation to facilitate new orders. In line with this approach, he even proposed relocating the headquarters of HMM, South Korea’s largest shipping company, from Seoul to the port city of Busan to strengthen synergy between shipbuilding and shipping. These measures indicate the Lee administration’s intent to revitalize South Korea’s shipbuilding competitiveness from a national strategic perspective, demonstrating a strong willingness to cultivate the industry as a strategic pillar. Overall, Lee’s campaign pledges elevated shipbuilding to an unprecedented strategic level, signaling a shift in the government’s role from a passive “guardian” to an active industrial promoter.
**Early Signs of Post-Election Shipbuilding Policies**
After taking office, the contours of the new administration’s shipbuilding policies have begun to emerge. Early actions show the government moving in the direction outlined in the campaign platform, though the implementation process has already revealed signs of competing interests.
Lee fulfilled his campaign promise by pushing to relocate the Ministry of Oceans and Fisheries and state-controlled shipping giant HMM to Busan, aiming to realize the vision of making Busan the “Maritime Capital of East Asia.” However, this centrally driven adjustment quickly met resistance. HMM’s land-based labor union publicly opposed the forced relocation, arguing it would severely infringe on the company’s operational autonomy and employee stability. The union warned of decisive action if the government proceeded, urging an immediate withdrawal of the plan. With stark opposition between labor and management, and involving shareholder interests, negotiations over HMM’s relocation could drag on.
Meanwhile, during a campaign stop in Gunsan on May 16, Lee stated, “With government intervention, Gunsan’s shipbuilding industry can surely recover.” He explicitly called for fully restarting HD Hyundai Heavy Industries’ Gunsan shipyard to resume full-scale shipbuilding—a statement hailed as a “turning point” for the shipyard. Local officials and businesses hope for concrete measures, such as prioritizing public vessel orders for Gunsan, providing mid-to-long-term order support, and establishing a dedicated “shipbuilding industry control tower.” However, HD Hyundai Heavy Industries remains cautious, citing market conditions as the basis for deciding whether to fully restart the shipyard, and has shown reluctance to resume full-scale operations. Local critics view this as “strategic avoidance,” deliberately sidestepping the issue despite strong market demand.
These incidents highlight that even with strong political will, the new government’s industrial policies face multiple constraints during implementation. To ensure policy effectiveness, the administration must improve acceptance among local stakeholders and balance corporate commercial considerations with regional development goals. In the coming period, the rollout of South Korea’s shipbuilding policies will likely involve complex negotiations, with outcomes remaining uncertain.
**Pragmatic Diplomacy Opens New Order Opportunities**
Amid global competition and geopolitical shifts, the Trump administration’s signals of deepening shipbuilding cooperation with South Korea were seen as a rare opportunity by the industry.
Both the Yoon Suk-yeol and Lee Jae-myung administrations have shown keen interest in U.S.-South Korea shipbuilding collaboration, viewing it as a key avenue for securing orders and advancing technology. In early 2025, as opposition leader, Lee noted at a forum on “U.S.-South Korea Alliance and the Future of Shipbuilding and K-Defense Industries” that while the U.S. lacks global competitiveness in shipbuilding, South Korea retains technological and experiential advantages despite pressure from China. He argued that closer cooperation could bring more orders and new opportunities.
Lee further revealed that the U.S. Congress is advancing legislation to encourage allied participation in warship construction, suggesting South Korean firms could help fill gaps in U.S. military or commercial shipbuilding.
At the forum, representatives from South Korea’s “Big Three” shipbuilders—HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries—proposed measures such as budget support for eco-friendly vessel R&D, a defense export promotion fund, enhanced financing for small and medium-sized shipbuilders, and relaxed restrictions on military vessel repairs. Lee responded positively, pledging to explore legislative and fiscal support for such cooperation.
Strengthening U.S.-South Korea shipbuilding ties has thus become a strategic imperative. On one hand, leveraging U.S. efforts to revive domestic shipbuilding could help South Korea secure commercial and military orders, addressing its own order shortfall while solidifying its position in high-end markets. On the other hand, collaboration in maritime defense equipment would advance South Korea’s “K-Defense” strategy.
These developments indicate that Lee’s shipbuilding policies incorporate alliance-driven market expansion, serving both bilateral relations and economic interests. Against the backdrop of U.S.-China rivalry, this approach holds pragmatic appeal.
**Emphasis on Green and Digital Transformation**
Aligning with global trends toward green and smart shipping, the new administration’s policies tilt toward intelligent and eco-friendly vessels. Lee’s campaign platform prioritized “smart and eco-friendly future ships,” underscoring South Korea’s need to lead this emerging market.
Smart shipping technology is another focus. South Korea aims to maintain its edge in high-tech vessels by investing in autonomous navigation systems, remote ship control, and integrated smart management platforms. Lee has pledged to drive smart ship development through pilot projects, ensuring South Korea’s first-mover advantage. The government is expected to accelerate commercialization through industry-academia collaboration and pilot demonstrations while advancing digital transformation in shipbuilding to reduce reliance on low-cost labor.
These measures highlight carbon-neutral and digital-era upgrades as key policy priorities. South Korea seeks to counter competitors like China by playing the “technology card” over the “cost card,” reinforcing its lead in high-end and green vessels. This aligns with tightening IMO environmental regulations and evolving shipowner demands. South Korean shipbuilders’ strong orderbooks for high-value vessels like LNG carriers and ultra-large container ships reflect early positioning in green and high-tech niches.
If Lee fulfills his pledges, the government will likely prioritize policy and funding support for green and smart ship R&D to sustain South Korea’s competitive edge.
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