Author: Reuben F. Johnson

Kuala Lumpur

At one time US companies were some of the most active in the Pacific Rim defence market

Around a decade ago at the Singapore Air Show the executive of a major US defence company told me more than once “my best sales agents are the Chinese. Every time they make a public show of steaming their aircraft carrier out for sea trials or commit another one of their violations of some nation’s territorial waters or build up another one of their artificial islands – that’s when my phone starts ringing. Other nations in the region suddenly want to know how soon they could have some US-made military hardware, especially if they are EDA [Excess Defence Articles].”

EDAs are used weapon systems that have been withdrawn from US military service.  Now they are sitting around in some US Air Force (USAF) boneyard or at some storage site at a US Army arsenal. Asian nations are interested in these items because they know they can have these weapon systems sooner and cheaper prices than new-build items.

His prediction was spot on. Within a year the USAF facility at Hill Air Force Base announced the delivery of 24 used EDA F-16s to Indonesia. According to the official USAF announcement, the F-16s “had been warehoused by the Ogden ALC’s 309th Aerospace Maintenance and Regeneration Group located at Davis-Monthan AFB in Tucson, Arizona.”

Surveying the number of companies from which country at the recent Defence Services Asia (DSA) expo in Kuala Lumpur it is hard to believe the US firms were ever very active in this part of the world.

But if that decade-ago period represented a high point for the attractiveness of US-made weapon systems this is a phenomenon that is a feature of the past in the Asian defence market.

DSA, which always takes place oin Aptilwas held for the 19th time this year. The venue for the event, was again the Malaysia International Trade and Exhibition Centre (MITEC), one of the largest and most modern facilities of its kind in the region.

Turkey, the PRC, and Sometimes Europe

But surprisingly, DSA 2026 saw the smallest US presence of almost any of the previous events of this kind. This is despite Malaysia being one of only two nations in the region that operate some version of the US F/A-18 fighter aircraft and the impending sale of F-16s to other regional buyers. The scaled back US footprint was the same almost symbolic size as that seen in 2023 at Malaysia’s other major defence and aerospace event, the Langkawi International Maritime and Aerospace (LIMA) exposition.

Instead, DSA saw a presence by Turkish defence and aerospace firms that dwarfed that of any of the other national pavilions. Turkish firms were almost the only major companies which exhibited either real hardware or full-scale mockups of military hardware instead of – like many other firm in attendance – subscale models.

Close behind the level of participation of Turkish defence firms were companies from the People’s Republic of China (PRC). These were not just the major PRC state-run defence conglomerates like China Electronics Technology Corporation, Ltd (CETC) or China Precision Machinery Import-Export Corporation (CPMIEC), one of the largest producers of missile systems.

In addition to those PRC defence prime contractors, different levels of the expo centre saw large pavilions of second- and third-order defence component system suppliers. These were collections of firms from different technology and industrial hubs in the PRC like the Hong Kong “feeder city” of Shenzhen.

In third place were several major European firms, but these are mostly those which have a product line which has a growing demand in the region – a demand largely generated by the developments of modern warfare across the globe. Partly as a consequence of the war in Ukraine, air defence is now one of the most sought-after type of weapons platform.

Air Defence in Demand

Unfortunately for US manufacturers of major air defence systems like the Raytheon Patriot Air (PAC-3) and Missile Defence System, the demand is less for this type of medium- to long-range and higher altitude platforms. The larger interest is in the Short-Range (SHORAD) system.

Prominent among these are Germany’s Diehl Aerospace IRIS-T ground-launched air defence battery and the Norwegian Konigsberg NASAMS. These are shorter-range systems, but they have proven highly effective in the war in Ukraine. One of the attractive aspects of both systems is that the missiles used are ground-launched versions of air-to-air missiles initially developed for tactical combat aircraft. This created economies of scale in the production of these missiles, so much so that Diehl are currently expanding their manufacturing capacity.

There are three aspects of these systems that make them attractive in the Asian market, said representatives from both the two European firms.

One is that they are mobile systems that are easy to deploy from one location to the next. The second is the cost factor. These missiles cost in the hundreds of thousands or less per shot instead of in the millions of dollars per missile, which is the case with the PAC-3.

But thirdly, as a representative from Konigsberg explained, “the NASAMS is capable of being datalinked with multiple other nodes – other batteries. An enemy can detect the radar signal of our system, but that does not necessarily reflect the range of the NASAMS system in that area.”

“Batteries can be redeployed to another location and another radar activated and the network can be extended into one direction or another. The presence of a radar in a certain location – due to the ability to that radar to datalink with others – creates an overall coverage of a given area that is impossible for an adversary to avoid by just flying around the zone where they think that radar’s range ends.”

The Questions of Asian Defence Spending

But despite the DSA event being one of the largest in all of Asia – Malaysia is not a big spender when it comes to defence programmes. When they do decide to make a major buy, they are looking for an option that is a lower cost solution that offers flexible payment terms.

In 2023 the country decided to pass up offers from other US, European and Russian suppliers and instead elected to purchase 18 of the Korea Aerospace Industries (KAI) FA-50 fighter and attack aircraft. These aircraft were already being assembled at KAI’s main plant in April of this year.

This is one of the reasons that the presence of any US or Russian aircraft firms at DSA was almost non-existent. Most of the potential US and Russian suppliers cannot produce enough combat aircraft fast enough to meet the requirements of potential customers – and their prices are becoming too high for most of the buyers in the region.

Budgets are also a problem in Asia. The major spenders like Australia, the ROK, Japan and Singapore have already firmed up their partnerships with suppliers long ago. The only national industries that have a product that appeals today to the nations with smaller economies and defence industrial bases are relative newcomers, which explains the attractiveness of ROK firms, which have had more success in finding new markets in the Asian region than almost any of the others.

The era of the 1990s and into the 2000s in which the US, European and Russian firms could do well in these markets has passed. While French, Italian and some other European suppliers are still finding new markets and doing well in the maritime systems market, what was once US and Russian territory appears to be increasingly taken over by the ROK and some of its industrial partners.

The PRC continues to offer a raft of high-technology weapon systems, but its customer base is limited. The fighter aircraft manufacturer Shenyang Aerospace has a new stealthy fighter for sale in the form of the J-35AE. But so far, the only nation that appears willing to enter negotiations is Beijing’s traditional defence industrial partner of Pakistan.

Defence marketing is almost always a long-term proposition. “One also has to remember,” said another US now-retired defence executive, “is that when you are selling a major weapon system to a foreign country – particularly in Asia – sometimes you see all of your progress to date erased, and you go back to zero and have to start over.”

Asia will continue to as a growing defence market and the need for weaponry will for some time now be set by what the US executive pointed to years ago about what is often called the “pacing threat.” The nervousness that many in the region feel about the actions of the PRC is a growing factor in procurement decisions. The question is if the traditional suppliers who had such a grip on the market a decade ago are now still going to be able provide weaponry at a competitive price and in a reasonable timeframe.