For global arms companies looking to ply their wares in Southeast Asia, Singapore is a sought-after client. And American and German hardware suppliers are poised for windfall profits as the island nation moves to shore up its defenses.

Last month, the wealthy city-state passed its biggest ever defense budget worth US$16.7 billion, or around 30% of the government’s total planned expenditure for 2019, with rich earmarks for defense, security and related diplomacy.

Singapore allocates between 3% and 5% of its gross domestic product on defense, well above the global average, while most regional states spend closer to 1-2% or lower, according to Stockholm International Peace Research Institute data.

… Analysts believe Singapore’s pro-American security orientation and role in facilitating US military activities in the region have likely irked China’s leadership. The island nation plays host to American littoral warships and US Navy P-8 maritime patrol planes that conduct reconnaissance in the South China Sea.

“The SAF’s possession of significant American-made military technology and the accumulated institutional capacity of inter-military linkages and interoperability, would not be taken lightly by Beijing,” said Collin Koh Swee Lean, a research fellow specializing in Southeast Asian defense at Singapore’s Nanyang Technological University.