Unprecedented economic growth in Asia has spurred military modernization in most of the region’s countries where they are competing to boost their army, navy and air force capabilities.

This has led to a warning by defence chiefs that Asian countries must guard against destabilising the region.

Asian governments, boosted by stronger economic growth and worried by regional tensions, have been beefing up their armed forces and there are fears the build-ups could be dangerous in the long run if not managed well, the chiefs told an international security conference last weekend.

“There are indeed inherent perceptional sensitivities in military build-ups that could create miscalculations, misjudgements, and mistrust,” Indonesian Defence Minister Purnomo Yusgiantoro told the Shangri-La Dialogue, an annual forum in Singapore.

“In order to avoid military modernisation becoming destabilising, there is a need for greater strategic transparency.”

Asia overtook European members of Nato in terms of nominal military spending for the first time last year, according to a report by the London-based International Institute for Strategic Studies (IISS) released in March.

In the annual report on the world’s militaries, the IISS – which organises the Shangri-La Dialogue – said China’s defence spending in real terms rose 8.3 per cent between 2011 and 2012, while in Asia as a whole, spending rose 4.94 per cent last year.

Globally, China now ranks second behind the United States in total military spending, although the Pentagon’s annual budget of $600 billion still dwarfs Beijing’s arms expenditure.

Philip Hammond, Britain’s secretary of state for defence, said rising defence spending in Asia was “worrying” as it was taking place against the backdrop of growing tensions over territorial disputes and competition for resources.

“(It) has the potential to escalate and become at best a prolonged source for instability and at worst, a driver for conflict,” he said.

On May 9, a Philippine coast guard ship fired on a Taiwanese fishing vessel along their sea border, killing a fisherman. Taipei reacted angrily and held naval exercises near the Philippines in a show of force against its bigger but poorly equipped neighbour.

China is locked in a territorial dispute with four Southeast Asian countries in the South China Sea, and with Japan over the Senkaku islands, which Beijing calls the Diaoyus, in the East China Sea.

And on the Korean Peninsula, tensions remain high between US-backed South Korea and the nuclear-armed North.

Latest statistics released by the Stockholm International Peace Research Institute showed China’s estimated defence spending nearly quadrupled from $37 billion in 2000 to $166 billion in 2012.

India’s defence spending has grown 67 per cent since 2000, reaching $46.1 billion in 2012, it said.

South Korea’s defence investments swelled from $20 to $31.6 billion while Japan maintained its defence budget throughout the period at $60 billion.

But Tokyo in January announced that it would increase military spending this year for the first time in over a decade by over $1.15 billion under a ruling party plan.

Japanese Defence Minister Itsunori Onodera, who also spoke at the Singapore defence conference, justified the country’s increased spending.

“We believe it is essential to build-up a defence posture that will contribute to the enhancement of regional peace and stability,” he said.

Analyst Conn Hallinan writing in peoplesworld.org said last year India was the world’s leading arms purchaser, including a deal that will spend $20 billion dollars on high performance French fighter planes. India is also developing a long-range ballistic missile capable of carrying  multiple nuclear warheads, and buying submarines and surface craft. Its military budget is set to rise 17 percent this year to $42 billion.

“It is ridiculous. We are getting into a useless arms race at the expense of fulfilling the needs of poor people,” Praful Bidwai of the Coalition of Nuclear Disarmament and Peace told the New York Times.

China, too, is in the middle of an arms boom that includes beefing up its navy, constructing a new generation of stealth aircraft, and developing a ballistic missile that is potentially capable of neutralizing U.S. carriers near its coast. Beijing’s arms budget has grown at a rate of some 12 percent a year and, at $106.41 billion, is now the second largest on the planet. The U.S. budget-not counting the various wars Washington is embroiled in-runs a little over $800 billion, although some have estimated that it is over $1 trillion.

Tensions between China and other nations in the region have set off a local arms race. Taiwan is buying four U.S.-made Perry-class guided missile frigates, and Japan has shifted much of its military from its northern islands to face southward toward China.

The Philippines is spending almost $1 billion on new aircraft and radar, and recently held joint war games with the U.S.  South Korea has just successfully tested a long-range cruise missile. Washington is reviving ties with Indonesia’s brutal military because the island nation controls the strategic seaways through which pass most of the region’s trade and energy supplies.

Australia is also re-orientating its defense to face China, and Australian Defense Minister Stephen Smith has urged “that India play the role it could and should as an emerging great power in the security and stability of the region.”

But that “role” is by no means clear, and some have read Smith’s statement as an attempt to rope New Delhi into a united front against Beijing. The recent test of India’s Agni V nuclear-capable ballistic missile is largely seen as directed at China.

India and China fought a brief but nasty border war in 1962, and India claims China is currently occupying some 15,000 square miles in Indian Territory. The Chinese, in turn, claim almost 40,000 square miles of the Indian state of Arunachai Pradesh. While Indian Prime Minister Manmohan Singh says that “overall our relations [with China] are quite good,” he also admits “the border problem is a long-standing problem.”

China’s forceful stance in the South China Sea has stirred up tensions with Vietnam, Taiwan, Brunei, and Malaysia as well. A standoff this past April between a Philippine war ship and several Chinese surveillance ships at Scarborough Shoal is still on a low simmer.