10 December 2015
China’s outbidding of Japan for the first high-speed rail project in Indonesia reflects Beijing’s eagerness to realise its 21st Century Maritime Silk Road (MSR) initiative. What does this signify for the Asia Pacific Region?
Indonesia took a big and highly significant decision to award China rather than Japan the Jakarta – Bandung high-speed rail project. Jakarta was in dilemma to choose between a trusted old friend (Japan) and a new emerging power (China) as it prepares to start the project in early 2016. The two East Asian giants had presented very competitive deals, with each offering favourable terms to the Indonesian government.
Despite an attractive proposition from Japan, China eventually secured the project with terms that Jakarta found hard to refuse. The clincher for China was its willingness to forego a sovereign guarantee by the Indonesian government.
… Emirza Adi Syailendra is a Research Analyst with the Indonesia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. An earlier version of this article appeared in the People’s Daily.
IDSS / Online
Last updated on 11/12/2015