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(Corrects executive name spelling to Rosander in paragraph 9)
* Malaysia, Vietnam, Indonesia among countries eyeing newjets
* Southeast Asian nations wary of China actions in SouthChina Sea
* European, Asian suppliers make ground on U.S. defencefirms
By Siva Govindasamy and Joseph Sipalan
SINGAPORE/KUALA LUMPUR, April 22 (Reuters) - With an eye onChina's more muscular stance in the South China Sea, SoutheastAsian governments are stepping up efforts to replace ageingfighter aircraft fleets, paving the way for multi-billion dollardeals in a boon for warplane makers.
Despite tight budgets across the region, sales executivessay they are busier than ever after a five-year lull - and bothindustry and government sources say the next months could seeseveral multi-billion dollar deals from Malaysia to Vietnam.
A trade conference held in Kuala Lumpur this week throngedwith would-be buyers and salesmen from Russian, French, British,Chinese, Pakistani and American firms. Held every other year,attendees reported it was busier than ever.
A prime drawcard was one of the region's biggest prizes:Malaysia, which is set to finally replace its Russian 1990s-eraMiG-29 fighters after several years of delays. Industry sourcessay Kuala Lumpur could buy up to 18 jets, a deal potentiallyworth more than $2.5 billion.
Options include the Saab Gripen, the Eurofighter Typhoon,Russian Sukhoi Su-30, and the Sino-Pakistani JF-17. France isoptimistic about winning an order for Dassault-built Rafales butother bidders are also hopeful.
"We are hoping to make Malaysia the ninth country to buy theTyphoon," said John Brosnan, who heads the Asian business forBAE Systems, one of the partners in the Eurofighterconsortium.
Malaysia's defence ministry did not respond to requests forcomment on the talks.
Vietnam, eyeing options beyond traditional supplier Russia,is among those next on the buyers list. It has had preliminarytalks with Saab and France's Dassault to purchase at least 12fighter jets, industry sources and a separate source familiarwith the government talks said.
"They seem to be keen on moving away from Russia, but it hasbeen dormant so far," said Kaj Rosander, regional director forGripen exports at Saab. "It looks like the next call will be onVietnam."
Industry sources say Vietnam is also in talks with Moscowover several Su-35s. Officials at Rosoboronexport, Russia's armsexport agency, declined to comment on any negotiations.
Vietnamese officials rarely comment on procurement matters,and did not respond to Reuters' requests for comment.
FOCUSING MINDS
While reluctant to comment publicly, officials in countriesincluding Indonesia and Vietnam privately say their renewedinterest in new fighter jets is driven in large part by China'sgrowing presence in the disputed South China Sea.
Chinese state media reported this week that a military planehad landed on Fiery Cross Reef, one of a number of new runwayson reclaimed artificial islands, fuelling expectations thatChina will soon deploy fighter jets at the doorstep of many ofthe Southeast Asian claimants.
"Rising tensions in (the Asia Pacific region) have seen along overdue process of military modernization move up thepolitical agenda in a number of countries," Craig Caffrey,principal analyst at IHS Jane's said in a report. "ThePhilippines, Indonesia, Japan and Vietnam are all followingChina's lead and we see no sign of this trend coming to an end."
Beijing for its part says it needs the facilities forself-defence and says the United States and others aremilitarising the region, not China.
By rights, U.S. defence firms should be benefitting as theregion renews and revamps - they were a heavy presence inSoutheast Asian sales 1980s and 1990s. But they now they facetough competition, as well as tighter purse strings.
Thailand, which has Northrop F-5s and Lockheed Martin F-16s,has bought the Saab Gripen and could order more from the Swedes,say industry sources familiar with the negotiations.
"We do want new jets, we have long-term plans, but we don'thave the money for it," Major General Kongcheep Tantrawanit,Thai defence ministry spokesman, said.
"There are no deals in the making right now."
Boeing executives had been plugging their F/A-18E/F SuperHornets to Malaysia, which operates the older Boeing F-18 Hornetvariants. But Kuala Lumpur appears to be leaning towards theEuropeans, say industry sources.
Boeing's only presence at this week's show was to promoteits unmanned systems. Boeing officials did not respond torequests for comment.
Meanwhile, Indonesia, which operates older Lockheed MartinF-16s, is close to an order for Russian Su-35s to supplement itsSu-30s, industry and government sources said.
It is also a partner in the Korean Aerospace Industry KF-Xfighter jet programme, which Lockheed is helping to develop.Lockheed did not respond to requests for comment.
For U.S. players, that leaves the list of likely partners atSingapore, which operates only U.S. fighters jets and is apartner in the Lockheed F-35 programme.
The region's other supplier, of course, is China itself.
Its JF-17, which it developed with Pakistan is a beingmarketed as a viable low-cost option for air forces, includingMalaysia and Myanmar. ($1 = 3.8700 ringgit) (Additional reporting by Patpicha Tanakasempipat in BANGKOK,Manuel Mogato in MANILA, Aradhana Aravindan in SINGAPORE;Editing by Clara Ferreira Marques and Lincoln Feast)