Regional defense experts say the arbitration ruling may lead other South China Sea claimants to ramp up their defense spending. Vietnam, Taiwan, Indonesia, Malaysia, Brunei and the Philippines all claim portions of the waterway, which is rich in fish and believed to hold significant underwater mineral resources.

“As states squabble over sovereignty issues and increase spending to safeguard their own interests, it is the global defense industry that is the real beneficiary of the South China Sea disputes,” said Jonathan Spangler, director of the South China Sea Think Tank in Taipei.

http://www.voanews.com/a/beijing-arms-spending-may-rise-south-china-sea-ruling/3419971.html

From interview transcript:

“China’s military spending increased by 321% from 2001–2014, making it six times higher than all other South China Sea claimants combined. Whether or not its defense expenditures will increase as a direct result of the ruling is trivial.”

“Interestingly, the Tribunal determined in Paragraph 1164 of the Award that China’s dredging and construction activities were not military in nature, basing its decision purely on Beijing’s own assertions. It is therefore ironic that, had China considered its own activities to be for military instead of civilian purposes, the Tribunal may not have had jurisdiction with regards to the Philippines’ Submission No. 14(d), which accused China of unlawfully aggravating and extending the dispute through through such activities.”

“China, like all claimants, has sought to enhance its naval and air defense capabilities in recent years. It has been an ongoing trend, not a sudden shift in acquisitions. Russia has been and will continue to be a major arms supplier to China and other countries in the region. As states squabble over sovereignty issues an increase spending to safeguard their own interests, it is the global defense industry that is the real beneficiary of the South China Sea disputes.”