China is spending more than ever on defence while the West is slashing military budgets.

China is leading the general trend in Asia of investment in defence, according to Military Balance, a study by the International Institute for Strategic Studies(IISS).

"While the West reduces its spending on defence, Asia is becoming increasingly militarised, as a result of rapid economic growth and strategic uncertainty," IISS director general and chief executive Dr John Chipman said.

Although military spending by China now accounts for 30 percent of the region's total defence spending, it represents "nascent rather than actual capability", Chipman pointed out.

"China, for example, does not yet have the capability to operate fixed-wing aircraft from a carrier," he noted.

"However, China's development of anti-satellite capacities, anti-ship ballistic missiles, cruise missiles and cyber-warfare capabilities preoccupies foreign defence planners as much as its drive to boost major platform capability."

Financial pressures from the current global economic crisis are forcing Western states, particularly Europe, to rein in their defence spending.

To save cash, there is an increase in pooled-defence resources.

"The effect of these cuts across European states was brought into focus by the campaign in Libya, which highlighted existing gaps in targeting, tanker aircraft, and intelligence, surveillance and reconnaissance," Chipman said.

"Questions were also raised about the stock-holdings of certain nations' precision-guided weapons.

"But given the continuing pressure on European public finances, there is little chance that defence budgets will reverse their downward trend any time soon."

Asia is, nevertheless, unlikely to soon topple the West in terms of military might.

"The divergent trends in defence spending between the West and Asia that we've highlighted today do not necessarily translate into an immediate shift in global military capabilities," Chipman said.

"The US and other Western nations will look to maintain a qualitative and quantitative edge over states, such as China, through continued investment in research and development, as well as an emphasis on the quality and reliability of equipment, leadership and training."