China's increased military spending and its growing assertiveness in territorial disputes are forcing countries in the region to boost their weapons purchase, leading to an Asia-Pacific arms race.
By 2020, the region's total military spending will rise to $533 billion a year from $435 billion in 2015, IHS Jane's has said.
Interestingly, China will also be one of the beneficiaries of this arms race as Beijing is the main supplier of arms to many countries in South Asia and Southeast Asia.
"Rising tensions in APAC have seen a long overdue process of military modernisation move up the political agenda in a number of countries. The Philippines, Indonesia, Japan and Vietnam are all following China's lead and we see no sign of this trend coming to an end," Craig Caffrey, principal analyst at IHS Jane's said in the report.
The increased defense spending in the region benefits China the most. According to the Stockholm International Peace Research Institute, China's arms sales recorded 88 percent rise in the 2011-15 period, compared with the previous five-year span.
The Philippines, Indonesia and Vietnam were among the top 10 countries with the fastest-growing defence budgets in the region. "These countries are following China's lead and we see no sign of this trend coming to an end," IHS Jane's said.
China's share of global arms exports stood at 5.9 percent between 2011 and 2015, up from 3.6 percent in the 2006-2010 period.
The US market share rose to 33 percent in the same period while Russia's share rose to 25 percent from 22 percent.
While Pakistan was the biggest arms buyer from China, accounting for 35 percent of total sales, Bangladesh and Myanmar followed with 20 percent and 16 percent respectively.
China accounts for about 40 per cent of the region's total defence spending. Apart from China, Japan, South Korea and Indonesia announced higher military spending last year.