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Asian navy buildup a fillip for shipyards

Dalian: The governments of Japan, Korea and China are set to come to the rescue of many big, well established yards once again during the downturn, and this time not through subsidies, but huge investments in navies.

Agence France Presse quotes naval consultancy AMI International, whose analysts are forecasting that Asian states will spend $60 billion to modernize their navies in the next five years. That amount is very similar to the USA's forecast spend over the same period. If the USA is excluded from calculations, it's more than the forecast combined spend among all NATO states.

AMI International VP Bob Nugent sees a focus on submarines, frigates and aviation-capable ships, as Asian countries begin to build navies for "blue water" use around the globe rather than focusing on local patrol.

China, Japan, and South Korea are expected to lead spending. South Korea has taken steps to maintain its world-leading shipbuilding capabilities despite the global downturn, and its capabilities have become a national asset that is translating into on-time, on-budget delivery of very advanced ships. India is also making investments, Singapore maintains a very modern fleet, and Australia's 2009 White Paper places more emphasis on the RAN. Malaysia, Indonesia and Thailand are also expected to invest in modernization over the next five years.

"Defense spending in Asia has proven stable over the last year and is expected to remain so. Looking at the global market, we've not seen the same cutbacks that are unfolding in Europe. In our view, this reflects greater macroeconomic stability and relatively less exposure to systemic and credit risk in most Asian economies as well as a recognition of how vital effective sea power is to national security and prosperity," Nugent said.

Big naval yards in east Asia include IHI Marine United in Japan, Daewoo in Korea, Bohai and Dalian in China. Probably the most high profile single naval vessel to be built in the next five years will be China's first aircraft carrier - a project that both local and foreign press now say will take place at Jiangnan Shipyard just outside Shanghai rather than the initial frontrunner for the prestigious contract, Dalian.  [15/05/09]


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