The Asian Arms Market: Good News for the US (and Bad News for Russia and China)
The Asian Arms Market: Good News for the US (and Bad News for Russia and China)

By Richard A. Bitzinger

Commentary

Some of the world’s largest arms buyers are in Asia. The Stockholm International Peace Research Institute (SIPRI) confirms that Asia (including the Indian subcontinent and Oceania) has remained the world’s single largest arms market for the past several decades.

According to the report, Asia accounted for a plurality (43 percent) of all international arms transfers for the period 2017-2021, easily outpacing the Middle East (the world’s other large arms market) at 32 percent and dwarfing Africa (5.8 percent) and the Americas (5.5 percent).

According to SIPRI, during the period 2017-2021, six of the ten biggest arms importers were in the region: India, China, Australia, Pakistan, South Korea, and Japan. India, in fact, alone accounted for 11 percent of all arms transfers during this period, maintaining its position as the world’s largest arms buyer for the past several years (and just ahead of Saudi Arabia).

These arms purchases have been enabled by a continuing upward trend in military spending in the region. Again, according to SIPRI, defense expenditures in Asia and Oceania in 2021 rose 3.5 percent over 2020 and were up a whopping 59 percent higher than a decade earlier. Obviously, there is plenty of money available for new weaponry.

All this is good news for the world’s major arms exporters, including the United States, Russia, China, Israel, and leading Western European arms manufacturers. India bought weapons from Russia, the United States, and Israel. South Korea and Japan were major buyers of U.S. military systems. Germany sold submarines to Singapore, and South Korea sold fighter jets to Indonesia. It was a more or less open market, and there were opportunities for all to close sales.

These trends may be shifting, and it is not good news for two of the world’s bigger arms exporters, Russia and China. The United States, in turn, may reap the benefits.

Take Russia. Before it invaded Ukraine, Russia was one of the largest exporters of arms to Asia. In fact, it was the leading supplier of arms to Southeast Asia, transferring $10.9 billion worth between 2000 and 2021, outstripping the United States ($8.4 billion). In particular, it sold Sukhoi jets to Malaysia and Indonesia and submarines to Vietnam.

An aerial view shows a residential building heavily damaged during a Russian military attack in Mykolaiv, Ukraine, on Oct. 13, 2022. (Press service of the State Emergency Service of Ukraine/Handout via Reuters)

All this is now in danger, as many countries have canceled arms deals with Moscow. Both India and the Philippines scrapped planned buys of Russian helicopters, for example, while Indonesia and Malaysia have decided against acquiring more Russian fighter jets.

Russian arms sales were already in decline before the war. Russian weapons transfers had fallen by 26 percent between 2012 and 2016 and 2017 and 2021, and its share of the global arms export market had shrunk from 24 percent to just 19 percent.

Traditionally, big buyers of Russian equipment, particularly India and Vietnam, have recently curtailed their purchases from Moscow. At the same time, these countries have begun to diversify their arms suppliers; India and Indonesia have increased their purchases from the United States, while Vietnam is buying from Israel.

A combination of sanctions (such as the expulsion of Russian banks from SWIFT, a system for international electronic funds transfers), the poor performance of Russian weaponry on the battlefield, and the general onus on buying arms from Moscow will put severe constraints on Russian arms sales for a long time. Russia may never recover its paramount position in Asia.

At the same time, China will probably find it hard to fill the gap left behind by Russia’s involuntary departure. Beijing has had some success in selling to Southeast Asia, such as anti-ship missiles, artillery systems, and multiple rocket launchers to Indonesia and Chinese warships and anti-aircraft missiles to Malaysia.

Nevertheless, Russia’s leading arms buyers in Asia—India and Vietnam—are unlikely to consider buying Chinese arms, given their adversarial relationships with Beijing. Countries like Malaysia or Indonesia are more likely to turn to the United States or Western Europe for advanced weapons systems like combat aircraft.

Moreover, China has not proven itself to yet be a reliable arms supplier. In 2017, Thailand signed a $1 billion deal with Beijing for three Chinese submarines, but this sale has been held up by Germany’s refusal to export diesel engines that would go into the subs. The Thais may eventually accept inferior Chinese diesels, but this sale could leave a bad taste in the Thais’ mouths regarding future buys.

China will likely continue to depend on just a handful of countries—particularly Pakistan, which accounts for nearly half of all Chinese arms exports—for the bulk of its revenues from arms transfers to Asia.

The Asian arms market is on the brink of a major transformation. Russia’s self-inflicted wounds have left behind a vacuum that other arms-producing states could sweep in to fill. Especially in Southeast and South Asia, Western European defense firms, Israeli arms manufacturers, and even wannabe arms exporters like South Korea and Turkey could find new markets for their wares.

The United States could particularly benefit. The war in Ukraine has demonstrated the effectiveness of weapons systems like the Javelin antitank munition, the Stinger air-defense missile, and the HIMARS multiple rocket launcher. The export of such weapons could skyrocket. A more open Asian arms market, with Russia largely out of the way and China unable to fill the gap, would be America’s to lose.

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