Share this article

Asian military spending is growing rapidly, driven by the increased wealth of the region and continuing tensions in this vast expanse of the globe. A recent US Department of Defense report found that much of the build up has been triggered by China’s growing military reach, designed to boost Beijing’s power to influence regional disputes.

In Southeast Asia, the region bordering China, governments are particularly alarmed by China’s growing military power. The South China Sea is a prominent flashpoint, with China, Vietnam, the Philippines and Malaysia all involved in territorial disputes in the area.


Since a military coup in 2006, Thailand has dramatically increased its military spending, upgrading equipment dating back to the Vietnam and Cold Wars. The Royal Thai Air Force (RTAF), for example, is seeking to replace its more than 30-year-old F5 E/F fighters with Swedish Gripen JAS 39s at its Surat Thani airbase. Six have been purchased and are scheduled for delivery in 2011, along with two Saab 340 turboprop aircraft. One Saab 340 will be outfitted as an S-1000 airborne early warning system with Saab’s Erieye radar, while the other will be a training and transport platform.

The purchase of another six aircraft was put on hold due to the economic recession. The RTAF intends to procure them, along with associated equipment, spare parts and training, and a second Saab S340 Erieye AEW system aircraft, for about $500m over a five-year period from 2013-2017.

As well as concerns over China, the RTAF cited the need for new combat aircraft to match neighbouring Malaysia’s new Su-30s. Malaysia completed delivery of 18 of the air superiority fighters – also capable of ground strikes – in 2008. In 2009, Malaysia also announced plans to phase out its MiG-29N fighters in the coming years, but what it will replace them with is yet to be announced. Russia is believed to have offered more Su-30s, as well as the Su-35 and the MiG-35. Malaysia is also considering the Boeing F/A-18F, the Eurofighter Typhoon, the Dassault Rafale, and the Gripen.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
“Indonesia is also looking to replace its fleets of BAE Hawk Mk53 trainer jets and OV-10 Bronco aircraft as part of a more general modernisation effort.


Relations between Indonesia and Malaysia are also strained. Indonesia has long complained about the poor treatment of Indonesian workers in Malaysia, while the Malaysians often accuse Indonesian fishermen of intruding into their territorial waters.

Indonesia turned to Russia after the US and the European Union imposed arms embargoes on the country, which came about following Indonesia’s military intervention in East Timor in 1999. In 2003, Indonesia armed itself with two Su-27SK single-seat and two Su-30MKK twin-seat fighters. It added six more in 2007, and a three SU-27SKM aircraft will arrive later in 2010.

Indonesia is also looking to replace its fleets of BAE Hawk Mk53 trainer jets and OV-10 Bronco forward air control / counterinsurgency aircraft as part of a more general modernisation effort. The country is believed to have chosen China’s Chengdu FTC-2000 and Russia’s Yak-130, although no official announcement has yet been made.


Vietnam and China have an uneasy relationship, fighting a border war as recently as 1979. Hanoi is also wary of Beijing’s expansionary policies in the South China Sea. China occupied the Paracel archipelago in 1974, when its troops overwhelmed a South Vietnamese garrison occupying the islands, but Vietnam maintains its claim. The Spratly Islands, occupied by relatively small military forces from Vietnam, China, Taiwan, Malaysia and the Philippines, are another potential flashpoint.

Vietnam has been upgrading its military in general, forging closer ties with the US and Russia to counter the threat from China. Russia and Vietnam signed two major arms deals in 2009, when Moscow agreed to sell eight Su-30MK2s to Hanoi and to construct six Kilo-class diesel submarines for the Vietnamese Navy. In February 2010, Russia agreed to supply a further 12 Su-30MK2 fighters and associated weapons in a deal worth around $1bn. The aircraft will be delivered in 2011 and 2012.


The most potentially explosive relationship in the region is between India and China, both emerging economic superpowers. New Delhi believes that Beijing is trying to encircle it with the "string of pearls" doctrine, under which China has gained access to ports in Myanmar, Sri Lanka and Pakistan. In addition, the emergence of Maoists as a major political force in Nepal, traditionally under India’s sphere of influence, has fuelled these fears. Beijing, in turn, is concerned India is joining forces with other states traditionally hostile to China, such as Japan and Vietnam.

“Despite growing military ties with the US, Russia remains the main supplier of arms to India.”

Despite growing military ties with the US, Russia remains the main supplier of arms to India. In September 2010, India and Russia announced a $600m joint venture to manufacture military transport aircraft for the two countries. The 50:50 venture was signed by India’s state-owned Hindustan Aeronautics, Russian United Aircraft Corp and the Russian state-run arms exporter Rosoboronexport.

Russia is also in the race for a $12bn contract to sell 126 fighter jets to the Indian Air Force, and supply hundreds of combat helicopters to the country’s army. The fighter jet order is the world’s biggest in 15 years, and has attracted bids from Lockheed (F-16), Boeing (F/A-18E/F Super Hornet), Dassault (Rafale), Eurofighter, Russia’s United Aircraft Corp (MiG-35), and Saab (Gripen).

India is preparing to receive the first of 80 Russian Mi-17 IV medium-lift helicopters before the end of the year and, according to local newspaper reports, is also planning to order a further 59. The Indian Air Force has also recently signed a contract with Rosoboronexport, Russia’s state-controlled arms exporting agency, to upgrade its fleet of Soviet-vintage MiG-29 fighters and Il-76 airlifters, while the Indian Navy has placed an order for 45 MiG-29K carrier-borne fighter jets.

Early this year, Russia and India signed a $1.5bn contract for 29 more MiG-29K carrier-based fighter jets, and have reportedly negotiated another for a delivery of 42 Su-30MKI to the Indian Air Force.


Tokyo is seeking to buy 40-50 aircraft to replace its McDonnell Douglas F-4s, which date back to the Vietnam War. The Eurofighter is in the running, as is Boeing’s F/A-18.

“China’s one weakness is that it does not yet have the ability to produce its own jet engines; it relies on imports from Russia.”

Common threads

The common thread linking all of these developments is the build-up and modernisation of China’s air force. In the middle of the noughties, China decided to aim for an air force containing more than 500 Russian designed Sukhoi Flanker fighters, a fleet comparable to the United States Air Force fleet of around 600 Boeing F-15 Eagle fighters. In addition, China is replacing Cold-War era fighters with the indigenously built Chengdu J-10 fighter, which is comparable to the F-16 Falcon fighters operated by many air forces across Asia.

China’s air force has already shifted from second and third generation fighters to the fourth generation in the past ten years. The country’s one weakness is that it does not yet have the ability to produce its own jet engines; it relies on imports from Russia.