* Defence budgets shifting East, study finds
* Opportunities in East are double-edged, analyst says
LONDON, June 25 (Reuters) - Asian powers are outpacing the
United States to become the biggest spenders on defence by 2021
and are fuelling an "explosion" in the global arms trade, a
The global arms trade jumped by 30 percent to $73.5 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 on Tuesday.
"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
The United States has accounted for the lion's share of
global defence spending over the past decade, but budget cuts in
Washington, as it withdraws from countries such as Afghanistan,
mean that it will account for just 30 percent by 2021 to fall
behind Asia at 31 percent.
Military spending in the Asia Pacific region - which
includes China, India and Indonesia - will rise 35 percent to
$501 billion in the next eight years, compared to a 28 percent
fall in U.S. spending to $472 billion over the same period, IHS
"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 U.S. dominance of defence."
said Guy Anderson, senior principal analyst at IHS Jane's.
China's ramp-up in defence spending in recent years is
worrying its neighbours such as Japan, with whom it is currently
embroiled in a stand-off over a series of uninhabited islands,
despite its repeated reassurances that there is nothing to fear.
Japan, as well as India and South Korea, are among countries
being courted by weapon makers such as Lockheed Martin,
Boeing and BAE Systems who want to sell them
fighter jets and other equipment to make up for reduced spending
in their Western home markets, but such deals tend to require
investment in the buyers's defence industries.
India, for instance, is speaking exclusively to France's
Dassault Aviation on a $12 billion order of 126
warlanes and wants 50 percent of the work to be given to Indian
China is expected to increase its defence budget by 64
percent to $207 billion by 2021, compared to India and Indonesia
which are respectively forecast to spend 54 and 113 percent
more, the study said.
These countries aspire to build thriving defence industries
capable of developing modern equipment such as fighter jets and
aircraft carriers, and may be able to export "world class kit"
rivalling that of the West in a decade as a result of their
willingness to spend, IHS Jane's said.