Explosive new powerbase: Asia goes for broke with arms race

For the first time, the continent is spending more than Europe. But which nation will emerge strongest?

Delhi, Beijing

Last week it was China that captured the headlines. This week, the attention is on India. Eleven days ago, the authorities in Beijing announced an 11.2 per cent increase in its military budget, a rise that was in line with those of the past decade and underscored the country's continuing emergence as a global power.

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Officials in Delhi are today expected to announce India's military budget for 2012-13. Last year, despite austerity measures in some areas, defence spending was increased by 11.6 per cent as India continued to modernise and expand its military capabilities. If – as is anticipated – there is another double-digit increase today, it will highlight the growing arms race that has gripped Asia as nations compete both with each other and the US, for local and regional influence.

The true scale of this arms race was underscored in a report issued last week by the International Institute for Strategic Studies (IISS) in London, which said arms spending by Asian nations will this year for the first time overtake that of European countries, where economic woes have forced constriction.

The organisation's annual military balance survey reported that in addition to India and China, Australia, Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand and Vietnam are all spending heavily.

"There are three reasons for this," said Rahul Roy-Chaudhary, of the IISS. "First, Asian economies are rising; second, there is a dynamic procurement process taking place in South-east Asia, south Asia and east Asia, and third, there is an economic crisis in Europe."

The various reasons behind individual countries military spending priorities may differ. But Mr Roy-Chaudhary said it was clear that was a strong element of inter-connectivity – China watched US spending, India and Japan watched China's spending and Pakistan watched India's military expansion.

"India doesn't formally say that its budget is determined by what China is doing, but part of it is," he added. "Pakistan cares about India."

And it is clear that the ripples wash all ways. If Beijing is ever anxious about Washington, last year, when President Barack Obama announced that US military spending in the Asia-Pacific would be protected from the squeezes faced by other parts of the Pentagon budget, it was seen as a response to China's mounting influence, particularly over the oceans. Maritime concerns may be driving much regional military spending, say analysts, including China's purchase of its first ever aircraft carrier, the refurbished Soviet ship,Varyag, which, it was announced yesterday, will go into service later this year.

"What we see is an arms race among South-east Asian nations looking at China. There is a perceived threat there, in countries like Vietnam and the Philippines," said one defence analyst, who asked to remain anonymous.

While China has little interest in exporting socialism, aware that Soviet Russia collapsed because of its hang-ups on international socialism, it is very aggressive about the South China Sea. A former Filipino president, Fidel V Ramos, wrote this week that "Chinese global power and arms build-up, plus east Asia's economic gravitas, are driving neighbouring countries to boost defence spending".

Most disputes are focused on the Spratley Islands and the Paracel Islands, one of the most hotly contested territorial disputes in the world. Chinese forces seized the western Paracels from Vietnam in 1974 and sank three Vietnamese ships in 1988, events that have cast a shadow over relations since and are a potential flashpoint. China is unlikely to budge on these islands, because they provide cover and protect the route of the Chinese navy's nuclear submarines, which are stationed on Hainan Island, in the South China Sea.

However, everyone in the region seems to have a claim on the Spratleys, including China, Vietnam, Taiwan, Malaysia, Brunei, and the Philippines. "We see the disputes in the South China Sea as potentially the most pressing concern in terms of conflict in the region. It could be a spat over fishermen, or over an oil-drilling platform. The potential is always there, although it probably wouldn't develop into an open conflict," said Mr Roy-Chaudhary.

China is also active on dry land, spending more money in Tibet, not only on keeping the restive population there under control, but also on deploying more troops on the plateau at Tawang, near Arunachal Pradesh. China has a long-running border dispute with India over this area. The Chinese are deploying troops and aircraft and other equipment to the Himalayan area to see how they withstand the winter. In this arena, one that is particularly sensitive to India because it lost part of this territory to China during a 1962 war, Delhi has responded with men and machines.

"India has made more efforts to raise two mountain divisions, which you can say is a response to China," said Laxman Behera, of the Delhi-based Institute for Defence Studies and Analysis.

China's announcement earlier this month said that its military budget would be increased to $106bn (£68bn), from $95bn. Such an amount leaves it far behind the US, which in 2013 will have a military spend of $525bn, but considerably ahead of its regional rival India, which in 2012 allocated to $36bn to the military, around a third of it on salaries and benefits.

Many think China is probably spending even more but that it chooses not to reveal the true figure. Last year, the US suggested that Beijing's true military budget might be 60 per cent higher, at around $160bn. Some analysts, believe China's military spend could double in the next three years.

Chinese Defence Ministry spokesman Geng Yansheng said last week that it was "quite normal" to upgrade the military in an era of rapidly developing technology. "Weapons and equipment development is undertaken to maintain national security. It does not target any specific country or objective," he said.

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