Japan still leads in Southeast Asia infrastructure race, even as China ramps up belt and road investments: report

Japanese-backed projects in the region’s six largest economies – Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam – are valued at US$367 billion, compared with China’s US$255 billion, the figures show

Infrastructure in Asia

Bloomberg

Published: 8:17pm, 23 Jun 2019

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Japan is still leading the Southeast Asia infrastructure race against China, with pending projects worth almost one-and-a-half times its rival, according to the latest data from Fitch Solutions.

Japanese-backed projects in the region’s six largest economies – Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam – are valued at US$367 billion, the figures show. China’s tally is US$255 billion.

The figures underline both the rampant need for infrastructure development in Southeast Asia, as well as Japan’s dominance over China, despite President Xi Jinping’s push to spend on railways and ports via his signature Belt and Road Initiative.

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The Asian Development Bank (ADB) has estimated that Southeast Asia’s economies will need US$210 billion a year in infrastructure investment from 2016 to 2030, just to keep up the momentum in economic growth.

The latest Fitch figures, count only pending projects – those at the stages of planning, feasibility study, tender and currently under construction.

Fitch data in February last year put Japan’s investment at US$230 billion and China’s at US$155 billion.

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Vietnam is by far the biggest focus for Japan’s infrastructure involvement, with pending projects worth US$209 billion – more than half of Japan’s total. That includes a US$58.7 billion high-speed railway between Hanoi and Ho Chi Minh City in Vietnam.

For China, Indonesia is the primary customer, making up US$93 billion, or 36 per cent, of its overall. The prized project there is the Kayan River hydropower plant in North Kalimantan, valued at US$17.8 billion.

Across all of Southeast Asia and by number of projects, Japan also carries the day, though by a smaller margin: 240 infrastructure ventures have Japanese backing, versus 210 for China in all 10 Southeast Asian economies.

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