Singapore will soon pick the winner of a $1 billion tender for military utility helicopters, the first of several lucrative deals the island nation is pursuing as it modernizes its air force and navy amid rising tensions in the region.

With Southeast Asia’s largest defense budget, Singapore is a key prize for global arms companies as it looks to invest in new technology and replace ageing equipment.

China’s increasingly assertive actions in the South China Sea, which are worrying Southeast Asian countries, are partly a factor, say analysts, given that these have led to Singapore’s neighbors spending more on their militaries.

Modern military technology also helps Singapore to keep its edge and compensates for its small size and population, said Richard Bitzinger, a regional security expert at the S. Rajaratnam School of International Studies in Singapore.