Chinese sanctions on Hanwha Ocean might impact MASGA project in U.S., says DAPA chief
Published: 27 Oct. 2025, 19:41
Updated: 27 Oct. 2025, 20:09
Audio report: written by reporters, read by AI
![Seok Jong-gun, head of the Defense Acquisition Program Administration (DAPA), answers questions from lawmakers during a parliamentary audit held at the National Assembly in western Seoul on Oct. 17. [NEWS1]](https://koreajoongangdaily.joins.com/data/photo/2025/10/27/95312380-6ee0-47d1-b8e3-6c059326311e.jpg)
Seok Jong-gun, head of the Defense Acquisition Program Administration (DAPA), answers questions from lawmakers during a parliamentary audit held at the National Assembly in western Seoul on Oct. 17. [NEWS1]
Recent sanctions by China against the U.S. subsidiaries of Hanwha Ocean could have “a definite impact” on the Make American Shipbuilding Great Again (MASGA) project — a Korea-U.S. shipbuilding cooperation initiative — according to Seok Jong-gun, minister of the Defense Acquisition Program Administration (DAPA).
Concerns have grown that the MASGA project, which involves Korean firms operating in a strategic U.S. industry, could become entangled in the escalating maritime rivalry between Washington and Beijing.
“This could ultimately affect MASGA,” he said, in response to Rep. Yu Yong-weon of the People Power Party, who said the sanctions could result in up to $60 million in damages within one to two years during a National Assembly audit of the Defense Ministry held Monday.
China’s Ministry of Commerce announced on Oct. 14 that five Hanwha Ocean subsidiaries in the United States, including Philly Shipyard and Hanwha Shipping, would be subject to a full trade ban. The shipyard had been visited by President Lee Jae Myung during his first trip to the United States in August, leading experts to suggest that the move may have been aimed more at Korea than at the United States — a demand from Beijing that Seoul clarify its stance amid intensifying U.S.-China tensions.
Seok said that while the MASGA project has not yet involved any transactions or formal cooperation contracts, “it is unlikely to have an immediate impact.” However, he warned that “Philly Shipyard may face difficulties sourcing necessary materials from outside the United States, which could ultimately affect MASGA.” He added that no specific damage estimate had been made so far.
On the delay of the Korean Destroyer Next Generation (KDDX) program, Seok acknowledged shortcomings in early-stage project management. “In hindsight, it would have been better if we had addressed key issues more proactively,” he said. “Now, resolving these problems requires significant time and cost, and we will work with more urgency.”
![Seok Jong-gun, head of the Defense Acquisition Program Administration (DAPA), answers questions from lawmakers during a parliamentary audit held at the National Assembly in western Seoul on Oct. 17. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/10/27/978dd5cd-d182-4508-a276-1668fd6a45fa.jpg)
Seok Jong-gun, head of the Defense Acquisition Program Administration (DAPA), answers questions from lawmakers during a parliamentary audit held at the National Assembly in western Seoul on Oct. 17. [YONHAP]
The KDDX project aims to deploy six 6,000-ton mini Aegis-class destroyers by 2030, with a total budget of 7.8 trillion won ($5.4 billion). Hanwha Ocean and HD Hyundai Heavy Industries were tasked with conceptual and basic design, respectively. Although the basic design was completed in December 2023, efforts to designate a contractor for detailed design and construction of the lead ship have been delayed by intense competition and legal disputes among the participating companies.
Lawmakers also raised concerns that technology from the KF-21 Boramae fighter jet, jointly developed by Korea and Indonesia, could be leaked to North Korea. The concern follows a report by Indonesia’s state-run radio broadcaster that, during a visit to Pyongyang for the 80th anniversary of the Workers’ Party of Korea earlier this month, Foreign Minister Sugiono held talks with his North Korean counterpart, Choe Son-hui, and signed a memorandum of understanding that included potential technical cooperation.
Because Indonesia is a co-developer of the KF-21 and has faced allegations of leaking sensitive information in the past, concerns have emerged over a possible technology breach. In response to a question from Rep. Han Ki-ho of the People Power Party, Seok said, “I do not believe KF-21 technology can be leaked. We have clearly restricted the end user and technology transfer to Indonesia only, and third-party transfers are not allowed.”
Regarding Vietnam’s import of the K9 self-propelled howitzer, Seok said that anti-tampering features are being developed in four areas, with two completed. “We’re applying encryption, obfuscation and other technologies, including holograms or tamperproof stickers,” he said. “Some of these measures have already been applied to the K9.”
![Visitors to a shipping industry fair held in Busan look at the model of the model of the Korean Destroyer Next Generation (KDDX) made by HD Hyundai Heavy Industries on June 7, 2023. [JOONGANG ILBO]](https://koreajoongangdaily.joins.com/data/photo/2025/10/27/cccd65c1-2456-481c-a045-b04e18521bf3.jpg)
Visitors to a shipping industry fair held in Busan look at the model of the model of the Korean Destroyer Next Generation (KDDX) made by HD Hyundai Heavy Industries on June 7, 2023. [JOONGANG ILBO]
![The KF-21 Boramae fighter jet flies across the sky near the Seoul Air Base in Seongnam, Gyeonggi, on Oct. 17. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/10/27/7a0a057d-7631-4e04-8fb6-26b4cc6296dc.jpg)
The KF-21 Boramae fighter jet flies across the sky near the Seoul Air Base in Seongnam, Gyeonggi, on Oct. 17. [YONHAP]
Seok also proposed that Korea appoint a dedicated minister to lead defense exports, citing the high-level diplomatic nature of arms sales.
“Defense exports operate under a government-to-government framework, where the role of national leaders is crucial,” he said. Responding to Rep. Lim Jong-deuk’s question about a defense industry command center, Seok added, “Given the growing scale of our exports and the need to manage domestic projects as well, I personally believe it would be beneficial to have a special minister who can represent Korea diplomatically as a defense export expert.”
In its policy briefing to lawmakers, DAPA said it plans to introduce a leasing and subscription model for weapons systems to make them available quickly when needed. “Instead of focusing on the ownership of weapons systems, we aim to build a flexible acquisition framework where equipment can be used on demand,” the agency said.
Defense experts have noted that for software-based platforms — such as AI-powered battlefield management systems — a subscription model could offer advantages in keeping systems up to date. DAPA said it is currently conducting policy research on the issue, to draft detailed plans in 2026 and revise relevant legislation the following year.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY CHUNG YEONG-GYO, PARK HYUN-JU [[email protected]]
with the Korea JoongAng Daily
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