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Arms makers try to cash in as Asian disputes escalate

Asia's top aerospace and defence show opens Tuesday in Singapore, with major global arms makers seeking to cash in on rising military spending in China and elsewhere as territorial disputes escalate in the region.

SINGAPORE: Asia's top aerospace and defence show opens Tuesday in Singapore, with major global arms makers seeking to cash in on rising military spending in China and elsewhere as territorial disputes escalate in the region.

A wide range of air and maritime attack and surveillance systems will be showcased at the biennial Singapore Airshow, which will also feature the latest developments in commercial aviation, such as Airbus' A350-XWB long-range aircraft.

"The Asia Pacific region is extremely important to us particularly as we broaden our global focus, and Singapore is a key market," said David Perry, vice president and chief global business development officer at US weapons firm Northrop Grumman.

"Our objective is to continue to... provide the most advanced capabilities to help meet the region's defence and security needs," he said in a press statement ahead of the event, which runs until Sunday.

Among Northrop Grumman's exhibits is the Triton unmanned aircraft system especially adapted for maritime surveillance.

US firm Lockheed Martin, which makes the F-16 fighter, will also have a big presence to promote anti-submarine warfare, surveillance and reconnaissance capabilities.

The defence wings of passenger aircraft makers Boeing and Airbus are also exhibiting their latest wares, including unmanned aerial systems.

Among Boeing's displays is the P-8A Poseidon, which it describes as the world's most advanced anti-submarine and anti-surface warfare aircraft.

Airbus will display the C-295 versatile tactical transport plane configured for maritime patrols.

Analysts say the balance of military power is gradually shifting to Asia, with countries beefing up their armed forces as their economies grow and regional tensions simmering because of territorial disputes.

China is embroiled in overlapping claims over islands in the South China Sea with Taiwan as well as the Southeast Asian states of Brunei, Malaysia, the Philippines and Vietnam.

Beijing lays claim to almost the entire sea, including waters close to the shores of its smaller neighbours, and its aggressive moves to enforce its claims have sparked concern over its ambitions.

Diplomatic tensions between Japan and China are also rising because of a dispute over uninhabited islands which Tokyo refers to as the Senkakus and Beijing calls the Diaoyus.

Meanwhile, the Korean Peninsula remains a potential flashpoint for an armed conflict between South Korea and its nuclear-armed neighbour, North Korea.

Rising Defence Spending

"Asia Pacific is the only region where from 2009 onwards we have seen a steady rise in defence expenditure," said Craig Caffrey, senior analyst at IHS Jane's, a defence industry consulting and analysis company.

He said in a report that, based on IHS Jane's latest projections for defence budgets, the Asia Pacific's share of the global budget spend would grow to 28 per cent, or $474 billion, by the end of the decade -- up from the current 24 per cent.

Caffrey said the region, excluding China, will overtake Western Europe in defence spending by 2015, as Australia, India, Japan and South Korea increase their defence budgets.

By 2015, China is forecast to spend $159.6 billion on defence, up from $139.2 billion in 2013.

This will be bigger than the combined defence budgets of Britain, France and Germany projected at $149 billion, it said.

China, which commissioned its first aircraft carrier in 2012 and carried out test flights on a stealth fighter jet, is already the world's second biggest defence spender after the United States whose budget in 2013 was $582.4 billion, IHS Jane's said.

The London-based International Institute for Strategic Studies said in its Military Balance 2014 report that in real terms, Asian defence spending was 11.6 per cent higher in 2013 than in 2010, while Europe's expenditures fell by 2.5 per cent in the same period.

On the civilian side of the Airshow, commercial deals potentially worth billions of dollars are expected to be announced.

Vietnam's first private airline, VietJetAir, is expected to announce the finalisation of an order for 62 Airbus A320 planes worth $6.1 billion, an industry source close to the deal said.

An order for 20 Airbus A380 superjumbos worth $8.0 billion by leasing group Doric Asset Management could also be announced, the source said.

The total value of deals during the Airshow's 2012 edition reached $31 billion, up threefold from 2010, organisers said.

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