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Welcome to the Winter 2017/2018 edition of Defence Procurement International. We’ve turned our focus to the Asia-Pacific region for this issue. Not only is there a wealth of vehicle replacement/upgrade programmes taking shape in this part of the world, of which Australia’s Land 400 programme stands out as being among the most complex, expensive and ambitious, but North Korean ballistic missile tests and territorial disputes have focused the minds of defence decision-makers in the region.

Both Japan and South Korea have opted for US missile defence technology; Aegis Ashore for Japan and the Terminal High Altitude Area Defense (THAAD) system for South Korea. However, the deployment of THAAD could upset the strategic balance of power, with China likely to increase its nuclear arsenal to strengthen its nuclear deterrence in the Asia-Pacific.

The ramping up of Japan’s missile defence capabilities is not only the result of the threat posed by North Korea. Japan also has territorial disputes with China over the Senkaku Islands in the East China Sea and with South Korea over Takeshima-Dokdo Island. China already has a sophisticated nuclear-capable ballistic missile capability, as well as cruise missiles. So Japan’s interest in missile defence needs to be viewed in the context of those geopolitical power plays and the range of perceived threats it faces.

North Korean ballistic missile tests have dominated media coverage. But a threat of a different kind is taking shape in another part of the region, which has wider ramifications for military superpowers like the United States.

China is amassing an increasingly sophisticated arsenal of missiles and air systems that threaten the US’s superiority when it comes to air power. According to the International Institute for Strategic Studies’ The Military Balance 2018, China’s Chengdu J-20 low observable combat aircraft could challenge the US's monopoly on operational stealthy combat aircraft.

China is also investing significantly in the maritime domain. It is ploughing investment into frigates, aircraft carriers, auxiliary ships, submarines, destroyers and corvettes. And unlike most Western countries that face some difficult decisions in the coming months and years as to whether they have the resources to match their defence ambitions, China seems to have unlimited resources to pursue advanced technologies.

The US still spends more on defence than any other country. However, years of budget sequestration, which President Donald Trump and Defense Secretary James Mattis want to reverse, has taken its toll on US military readiness and equipment modernisation. The US spends more on defence than the 2% of GDP target prescribed by the NATO military alliance However, one gets the impression that 2% is no longer thought to be the magic number, if it ever was.

Defence spending may be on the rise in Europe and the UK, but is meeting the 2% of GDP target enough when countries like Russia spend more than 4% of their GDP on defence? In the UK, a National Audit Office report has identified a £5 billion funding gap in the Ministry of Defence’s Equipment Plan.

Any increase in defence spending beyond that already planned by the MoD could help bridge some of that gap. Happy reading.

Best regards,
Anita Hawser
Editor