Asia defence spending rises in China's shadow, driving deals

Hong Kong

GLOBAL defence contractors are circling for business in Asia, with countries from Australia to Vietnam upgrading and adding everything from submarines to fighter jets as China expands its military reach.

Defence budgets will keep rising, according to IHS Jane's, which forecasts spending in the Asia-Pacific region will climb 23 per cent to US$533 billion annually by 2020. That will put it on a par with North America, which is expected to account for a third of global defence spending by then, from almost half now.

The figures reflect a shifting strategic dynamic, as China pushes for greater influence and the US seeks to preserve decades of dominance in the western Pacific. While military spending in Asia is coming off a low base - especially in South-east Asia - and remai…