The Jakarta-Bandung high-speed railway project highlights that even though China’s economic influence is substantive, the agency of Southeast Asian countries cannot be discounted, say researchers.
Indonesian President Joko Widodo stands near the Jakarta-Bandung high-speed railway before a test ride at Halim station in Jakarta, Indonesia, Sep 13, 2023. opened to the public on Oct 2, with the journey of its first bullet train bringing to a conclusion the fraught process of building high-speed rail in Indonesia. China provided substantial financial backing for the project through its policy banks and state-owned enterprises.
To cover the overrun, China wanted Indonesia to put up its state budget as collateral, raising questions about whether China was practicing debt trap diplomacy in the developing world. In 2015, both China and Japan submitted a bid. While there were added advantages to the Chinese bid, such as an offer of technology transfer, the key reason cited for Japan losing the bid was its insistence on a guarantee of loan from the Indonesian government. This highlights how Indonesia sought to maintain its sovereignty.
The East Coast Rail Link in Malaysia, financed by the Export-Import Bank of China, has faced similar issues. Stalled since 2016, with an initial projected cost of US$16 billion, the project was renegotiated by Prime Minister Mahathir Mohamad in 2019 to US$11 billion and a favourable contract for Malaysian workers to make the investment a more equitable deal between Malaysia and China.
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