Asia’s defence spending is set to exceed Europe’s this year, for the first time in modern history. this was the conclusion in the International Institute of strategic studies (IIss) annual report Military Balance 2012 which assesses the military capabilities and defence economics of 171 countries. China announced last month that it would raise its defence budget by 11 per cent while India raised its defence expenditure by 17 per cent, though at $38 billion this is still significantly lower than China’s $110 billion.

China, the region’s top spender, has, according to the IIss estimates, increased its share of regional military expenditure to more than 30 per cent. Beijing’s official expenditure in 2011 was more than two-and-a- half times the 2001 level. China’s development of anti-satellite capacities, antiship ballistic missiles, cruise missiles, and cyber-warfare capabilities preoccupies foreign defence planners as much as its drive to boost major platform capability. Its growing strength reinforces the gradual change in the balance of power across the taiwan strait. More importantly, China’s strategic priorities are gradually widening from the defence of its borders to force projection within East Asia and further afield, in order to secure sea lanes of communication.

China’s leadership transition is expected to take place this year while sensitive issues that impinge on questions of national sovereignty may be subject to particular attention. naval competition in the south China sea will likely continue and interested states will still pursue naval procurements. Managing tensions in the south China sea will be an increasing challenge. Meanwhile, the global redistribution of military power and defence spending continues. since the financial crisis in 2008, there has been a convergence in European and Asian defence spending levels.

While per capita spending levels in Asia remain significantly lower than those in Europe, on the current trend Asian defence spending is likely to exceed that of Europe, in nominal terms, during 2012. In Europe, defence budgets remain under pressure and cuts continue to procurement programmes, equipment holdings and defence organisations. Between 2008 and 2010, there were reductions in defence spending in at least 16 European NATO member states and some have exceeded 10 per cent. others have explored ways to pool and share capabilities, so as to save money while creating the same improved capability as was the case between Britain and France. the us has also embarked on reduction of defence spending after a period of substantial expansion.

A reassessment of policy and strategy is under way and the Pentagon’s new strategic Guidance adopted a new priority towards the Asia- Pacific, triggered by Washington’s perception of its economic and security interests in Asia. NATO‘s Chicago summit this month will attempt to identify areas of capability for member states to push forward the ‘smart defence’ initiative proposed by NATO’s secretary General Anders Fogh rasmussen. Meanwhile the us will remain by far the world’s major military power.