Asia’s defense boom is rewiring the global arms supply chain

For decades, arms sales went in one direction: the U.S. and Western Europe designed and supplied the world’s most advanced weapons, and Asian countries bought them. But that flow is quickly reversing as Asia, once an arms importer, is now emerging as a hardware manufacturer and arms exporter, driving the global defense industry in a more multipolar world. Japan’s recent decision to loosen its arms export restrictions is the clearest signal yet of Asia’s changing role in global defense. South Korea, too, is stepping in to fill the gap in Western inventories. South Korea’s Hanwha Aerospace kicked off Asia’s land systems exports to Europe in 2022, while LIG Defense & Aerospace recently stood out as the supplier of missile interceptors (known as MSAM-II). In 2025, Asia’s defense spending rose 6% to approximately $573 billion, outpacing global defense growth (which currently sits at roughly $2.6 trillion). Defense spending is likely to rise thanks to new technologies, diversification into aerial and naval products, and new strategic frameworks with global partners. The world is more volatile, as underscored by recent Middle East escalations that have put additional pressure on existing U.S. defense inventories. At the same time, rebuilding capacity across Western countries takes time, given constraints around industrial scale and skilled labor. Asian manufacturers offer scale, cost competitiveness, and local suppliers, making them indispensable partners in the next phase of global defense production. Beyond the U.S. and Europe, China is often cited as another contributor to global defense production. However, the current acceleration in defense spending is being driven mainly by Europe’s response to the Ukraine war and sustained U.S. investment, which together account for most of the incremental growth. China’s defense ecosystem follows a different set of market dynamics, customer segments, and interoperability frameworks, with exports and production shaped by traj