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Asia's Defense Spending
Submarine Sales Skyrocket in Asia

Asian countries have been on a shopping spree, procuring arms to boost their military capabilities as regional tensions mount. As China stirs up trouble in the region’s many overlapping and bitter territorial disputes, its rivals’ submarine purchases are shooting up, according to an industry report covered by National Defense:

The submarine market in the Asia-Pacific region is valued at $7.3 billion this year, but is projected to grow at an annual rate of 4.18 percent to reach $11 billion in 2025, according to a new report “The Global Submarine and MRO Market 2015–2025,” produced by Strategic Defence Intelligence, a London-based business information firm. The United States is expected to remain the largest market for submarines, with a projected cumulative spending of $102.2 billion over the next decade.

The growth in Asia is primarily driven by major countries such as China, India, Australia and South Korea, which are focusing more on developing their naval capabilities. This is attributed to the rising number of maritime conflicts and potential threats in the South China Sea as well as the Pacific and Indian Oceans, the report said.

“Growing Chinese assertiveness in disputes over islands in the South China Sea and the rapid modernization of China’s submarine fleet spurred the demand for submarines in countries such as India, Japan, Taiwan, Australia and Vietnam,” Sravan Kumar Gorantala, an analyst at SDI said in a statement.

Smaller nations such as Indonesia, Thailand, Vietnam and Singapore are also investing in submarine acquisitions in order to strengthen their naval arsenals, according to the report’s executive summary.

In 2013, Asia passed a milestone when its militaries first outspent Europe. By April of this year, Asia led the world in rising defense spending. Meanwhile, Japan recently made its first attempts to secure foreign arms sales (most prominently of its Soryu-class subs), and most recently countries with territorial disputes in the waters of the East and South China Seas have begun snapping up spy planes.

This race to arm up is being driven by Beijings’s aggressive expansionist policy, most recently and importantly exemplified by the island building it completed in the disputed Spratly chain north of the Philippines. The PLA’s budget itself continues to balloon, of course, and none of its neighbors can match it individually, but many are stepping up their game.

As General Karl Eikenberry wrote in our July/August edition of the magazine, increased defense spending by America’s allies in Asia is key to U.S. efforts to counter China’s longterm ambitions. Regional powers like India and Japan—along with a coalition of smaller powers who can’t do much alone but who could be formidable in concert—are working to balance Beijing’s growing military clout, perhaps a silver lining as Beijing’s belligerence continues.

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