Fighters, radar, marine patrols top Asia's military wish-list

By Raju Gopalakrishnan

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 defence 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 neighbourhood 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 programme 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 defence 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 defence, 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. defence 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 defence as a proportion of GDP. But economic growth is strong across much of the region, and the dollar expenditure on defence is definitely on the up.

That is good news for Western arms manufacturers, among the world's biggest companies, who are reeling from shrinking defence 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. defence contractors, said of the Asia-Pacific.

Lockheed Martin , the Pentagon's biggest supplier, and Boeing's defence 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