Asia Pacific military spending to overtake US by 2021

Asian powers are outpacing the US to become the biggest spenders on defence by 2021 and are fuelling an "explosion" in the global arms trade, a study said.

The global arms trade jumped by 30 per cent to US$73.5 billion (HK$570 billion) between 2008-2012 in spite of the economic downturn, driven by surging exports from China and demand from countries like India, and is set to more than double by 2020, defence and security consultancy IHS Jane's said yesterday.

"Budgets are shifting East and global arms trade is increasing competition. This is the biggest explosion in trade the world has ever seen," said Paul Burton, a senior manager at IHS Jane's whose study looked at 34,000 defence acquisition programmes.

The US has accounted for a majority of global defence spending over the past decade, but budget cuts in Washington, as it withdraws from countries such as Afghanistan, mean it will account for just 30 per cent by 2021 and fall behind Asia at 31 per cent.

Military spending in the Asia Pacific region - which includes China, India and Indonesia - will rise 35 per cent to US$501 billion in the next eight years, compared to a 28 per cent fall in US spending to US$472 billion over the same period, IHS Jane's said.

"The big Western defence companies have no option - export or shrink - but this could be sowing the seed of their own demise; the opportunities in the East are a double-edged sword, fuelling a trend which threatens US dominance of defence," said Guy Anderson, senior principal analyst at IHS Jane's.