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Related Topics World » Japan » Aerospace & Defense » Pilatus PC-9 aircraft of the Royal Australian Air Force (RAAF) Roulettes aerobatic display team perform during an aerial display at the Singapore Airshow in Singapore February 14, 2012. Credit: Reuters/Kevin Lam By Raju Gopalakrishnan SINGAPORE | Thu Feb 16, 2012 1:58am EST SINGAPORE (Reuters) - Singapore hosted military brass from across Asia this week at the region's biggest arms and aerospace bazaar, almost 70 years to the day since it fell to Japanese forces sweeping across Southeast Asia during World War Two. Japan has since become allied with most other Asian nations. It is now China which is the behemoth others are eyeing with unease. And bigger defense budgets, means sales of fighters, weapons and other tools of death and destruction are higher than ever before. At the Singapore Airshow, salesmen in business suits escorted visitors in the sweltering heat to mock-ups of the world's most advanced jet fighters, helicopters and transport aircraft parked on a tarmac. Nearby, inside a vast air-conditioned hangar, state-of-the-art radar and surveillance equipment were exhibited and deals for missile systems were being inked. Interest is shifting away from ground weapons like tanks and guns, analysts said, to jet fighters, maritime patrol aircraft, radar and in some cases submarines. Asia's mostly littoral nations are less concerned now with old neighborhood rivalries, focusing more on the need for force projection across seas, analysts said. For many, a resurgent China is the main threat. "Other than India-Pakistan and the Korean peninsula, the contested spaces in Asia are maritime spaces, particularly the South China Sea," said Andrew Davies, a program director at the Australian Strategic Policy Institute. "The vulnerabilities that countries feel are often maritime as well because of the dependence on energy supplies being shipped in by sea. China's aggressive pursuit of claims to islands in the South China Sea is causing much concern in the region. Taiwan, Malaysia, the Philippines, Vietnam and Brunei also have claims and the row is seen as the biggest security threat in Asia. According to IHS Jane's DS Forecasts, East Asia's spending on military aircraft will soar to $24.3 billion in 2015 from $15.9 billion this year. Expenditure on ground forces and traditional land weapons will grow only to $13.1 billion from $11.2 billion. Expenditure on navies will be mostly flat at $12 billion, although spending on submarines will jump to $3.1 billion from $2.5 billion. The forecast includes China, Japan, the Koreas and the Southeast Asian nations. Within three years, China's defense expenditure would exceed the combined spending of all other major countries in Asia, according to IHS Jane's. While all major Asian nations are forecast to increase spending on defense, China's military budget will double to $238.20 billion by 2015 from $119.80 billion last year, growing about 18.75 percent per annum. That pales in comparison to the proposed base U.S. defense budget of $525.40 billion for 2013, but the United States is cutting back, and the latest figure is about $5.1 billion less than approved in 2012. NOT AN ARMS RACE Analysts, however, say the surge in military expenditure is not an arms race, because most countries are spending less on defense as a proportion of GDP. But economic growth is strong across much of the region, and the dollar expenditure on defense is definitely on the up. That is good news for Western arms manufacturers, among the world's biggest companies, who are reeling from shrinking defense budgets and the economic slowdown in the West. "It is our biggest market right now," said Tim Carey, a vice-president at Raytheon Corp, one of the biggest U.S. defense contractors, said of the Asia-Pacific. Lockheed Martin, the Pentagon's biggest supplier, and Boeing's defense division each expect the Asia-Pacific to contribute about 40 percent of international revenues. Between them, the two companies wholly or partly manufacture everything from aircraft, ships, submarines and weapons systems to radar, frigates, satellites and space equipment. Lockheed Martin, which manufactures the F-35, the world's most advanced fighter jet, and Boeing, the maker of the F/A-18 Super Hornet, are among those hoping to cash in on the region's demand for military aircraft. South Korea is likely to award a contract for up to 60 fighters by mid-year while Malaysia is also looking to buy up to 24 aircraft. India, which announced earlier this month that France's Dassault Aviation was the preferred bidder for 126 fighters, could be in the market for additional planes, especially a variant that can be used on the aircraft carriers it is planning. "Everybody is going to upgrade their air forces," said Richard Kirkland, a vice-president at Lockheed Martin. "(What countries require is) an increased ability to say I want to know what is going on in the sea-lanes. And so manned and unmanned reconnaissance platforms and probably a growing awareness that undersea threats can pose a problem for stability and commerce. "Information awareness, the ability to communicate that, what is going on the oceans and what is going on undersea, that is the trend." Lockheed also sees Asia as the place to sell its Aegis naval combat systems, sensors and satellite equipment. Boeing is looking to hawk its AH-6 helicopter gunships and P8 series of maritime patrol aircraft. "The maritime environment in the Pacific has everybody's attention," said Jeff Kohler, a vice-president at Boeing Defense. "There are several countries that have asked the U.S. Navy and Boeing for demonstrations of the P8. Given the expanse of ocean and ranges, it's an ideal platform to have." Carey, the Raytheon executive, said he expected orders for 100 new maritime patrol aircraft in the region within the next three to five years, compared to about 1,000 in operation worldwide currently. "To see a 10 percent replacement in the short-term is very significant," he said. "In this region, maritime surveillance is being actively looked at by almost every government." IMAGE ISSUES It's not just threat perceptions that are driving weapons purchases. As Asian nations become more prosperous, they have more money to spend on defense, and internal security threats begin to dwindle, analysts say. Their vision of themselves begins to change, and then, so do their arms purchases. "As they start looking outwards and they have more money, all of a sudden things like high performance aircraft and naval platforms start to become attractive for them," said Davies at the Australian Institute. "Even in the absence of a regularly identified security threat, they will probably be doing that anyway because that's what countries do. It's part of being seen to be a successful country to have a sophisticated military, I think it's a perception that is what successful countries do. In Asia, other than China, India is seen as the country to watch in defense purchases as it plans to spend $100 billion on weapons over the next decade. That is of immediate concern to old enemy Pakistan, but also a factor for other countries in the region. What excites arms manufacturers is that India faces a varied landscape of defense needs -- insurgencies, a tense border with Pakistan, high-altitude skirmishes in the Himalayas, a need for air defense and its intention to have a blue-water navy to rival China. "There is almost certainly an element of competition there," said Davies. "China and India are not fans of one another but there's also that both countries are going from short-range land-based militaries to more strategic forces. "India and China both have global naval aspirations, nuclear submarines and aircraft carriers." India, which plans to put three aircraft carriers into operation by 2017, took delivery of its first of six planned nuclear submarines earlier this year. China has more than 60 submarines and commissioned its first carrier last year. Elsewhere in Asia, Japan, South Korea and Singapore have submarines, and Thailand, Malaysia and Indonesia are eyeing purchases. CYBER China is also seen as a threat in cyber-warfare, participants at the airshow said. Indeed, cyber-security is seen as a big growth area for defense contractors and in the region Japan particularly is seen as spending considerable amounts on the sector. "Information security, protection of data, is at the forefront of every company, and every nation, and we are actively involved in helping governments particularly set up systems to protect their information technology," said Kirkland at Lockheed Martin. "The interesting thing about protection of cyber-information is that there are no boundaries," he added. "If you look at the top five or six major things that Lockheed is thinking about, information technology and the protection of that is significant." Ultimately, countries looking to at least militarily match China in the region will have to rely on the United States and its huge Pacific command. "The name of the game for the U.S. is the ability to project force," Kirkland said. "The name of the game for some of our allies is the ability to share in a joint operation to maintain stability and their economic security zone. It's the marriage of the capabilities between the nations that will then keep the peace." That has implications for military equipment, he said. "The key is the ability to integrate what you have and what I have so that we can operate together." (Editing by Jonathan Thatcher) World Japan Aerospace & Defense Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. 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