Military spending in Asia will top that in Europe for the first time this year, a London-based think-tank said Wednesday in its annual assessment of the strength of the world's armies.

The International Institute for Strategic Studies (IISS) said shifts in global economic power were increasingly reflected in military spending.

"Since the financial crisis in 2008, there has been a convergence in European and Asian defence spending levels," IISS Director-General John Chipman told a news conference to launch the "Military Balance 2012" report.

"While per capita spending levels in Asia remain significantly lower than those in Europe, on the current trend, Asian defence spending is likely to exceed that of Europe, in nominal terms, during 2012," he said.

China leads the way in Asia and is engaged in a modernisation programme of its forces and military hardware financed by its rapid economic development, the report says.

Defence budgets in Europe meanwhile have been cut as a result of the economic crisis, with Britain -- which has the biggest in Europe -- imposing cuts of up to 30 percent.

"In Europe, defence budgets remain under pressure and cuts continue to procurement programmes, equipment holdings and defence organisatons," Chipman said.

"Between 2008 and 2010, there have been reductions in defence spending in at least 16 European NATO member states. In a significant proportion of these, real-term declines have exceeded 10 percent."

He said the effect of the cuts in European defence budgets was illustrated in last year's campaign in Libya, "which highlighted existing gaps in targeting, tanker aircraft and intelligence, surveillance and reconaissance."

The United States, though its position as the world's military superpower is unchallenged for now, has cut back and reorientated its spending on defence, the IISS points out.

US military spending in 2011 was $739.3 billion compared to $89.8 billion in China.

The US defence budget alone far exceeded the combined total of the 10 other biggest spenders.