Boeing, Saab See Surveillance Plane Demand Rising Across Asia

Boeing Co. (BA), the second-biggest defense contractor in the U.S., and Saab AB (SAABB) expect demand for maritime and aerial surveillance systems to grow in Asia as territorial disputes intensify.

Demand for maritime patrol craft and affiliated equipment in the Asia-Pacific region is expected to grow steadily for the foreseeable future, Chris Chadwick, head of Boeing’s defense business, said yesterday in Singapore. Boeing and Stockholm, Sweden-based Saab both manufacture aircraft used for maritime patrol and surveillance.

“Every country has the responsibility to look after their borders and territories,” Anders Dahl, head of Singapore operations for Saab, said yesterday. “If you look at the geography of the region, that is very complicated.”

U.S. Defense Secretary Chuck Hagel is in Singapore this weekend as the sinking of a Vietnamese fishing boat after a collision with a Chinese vessel increases tension in Asia. China has been pressing territorial claims against Japan and the Philippines, two U.S. allies, and Vietnam, a former American foe that now welcomes U.S. military visits.

The U.S. has “a huge interest” in keeping sea lanes in the region open for commerce, Hagel told reporters on board a military aircraft on his way to Singapore. Hagel said he planned to discuss the South China Sea tensions in “some specific terms” and sees areas where China is “overplaying its hand.”

A Boeing Co. ScanEagle Unmanned Aerial Vehicle (UAV) flies over the ocean in this undated handout photo released to the media. Photograph: Boeing via Bloomberg Close

A Boeing Co. ScanEagle Unmanned Aerial Vehicle (UAV) flies over the ocean in this... Read More

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A Boeing Co. ScanEagle Unmanned Aerial Vehicle (UAV) flies over the ocean in this undated handout photo released to the media. Photograph: Boeing via Bloomberg

Chinese Drilling

China’s deployment of a drilling rig near the contested Paracel Islands sparked violent protests in Vietnam this month and led China to send ships to evacuate workers from the country after three Chinese nationals were killed. It spurred confrontations between coast guard vessels, including the use of water cannons and accusations of boats being rammed. China says the rig is in its territory and that it has long drilled in the area.

The U.S. has urged the Association of Southeast Asian Nations and China to agree on a code of conduct for the South China Sea and called China’s actions “provocative” after the clashes with Vietnam. Even nations that have kept out of the territorial disputes are now being drawn in, with Indonesia noting China’s “nine-dash line” map, which covers a large part of the South China Sea, touches on waters in its Riau province.

To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Jim McDonald

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