China and Japan Compete for Southeast Asia's Railways

May 4, 2016 | 09:31 GMT

Maintenance workers toil on a railway over the century-old Long Bien bridge in Hanoi, Vietnam. The Asian Development Bank estimates that to sustain its economic growth, Southeast Asia must invest $8 trillion by 2020 in improving its infrastructure. (HOANG DINH NAM/AFP/Getty Images)

China and Japan's competition for commercial influence in Southeast Asia is heating up, and this time their rivalry has centered on the Malay Peninsula. In the coming months, Singapore and Malaysia are expected to move forward on a joint high-speed rail project that will connect five cities between Singapore and Kuala Lumpur. The 350-kilometer (about 217-mile) line is a key part of the geographically fragmented region's broader integration goals and, like other a number of other infrastructure projects in Southeast Asia, a priority for both Tokyo and Beijing.

China is hoping to use its vast capital reserves, high risk tolerance and strategic investments in the region to turn the project into part of a 1,700-kilometer, pan-Asian rail network connecting Singapore to Kunming, China. But Japan has its own plans for the railway's future. Tokyo is seeking to leverage its superior rail technologies, substantial foreign aid packages and deep commercial ties with Singapore and Malaysia to keep itself from being further sidelined in regional rail construction — a sector it once dominated. Regardless of how China and Japan's latest tussle plays out, Southeast Asian states will decide the contest based not only on economics but also on the broader geopolitical dynamics of the region, all the while doing their best to exploit the situation to get better deals on much-needed infrastructure improvements. Click here to continue reading…