Business | Commentary

Is Japan's rail diplomacy on the right track in S.E. Asia?

Tokyo shifts to mass transit strategy as Beijing leads race for high-speed train projects

by Shang-Su Wu

The Diplomat

The recent development of Japan’s high-speed rail projects in Southeast Asia may suggest the shinkansen is leaving the center of its railway diplomacy.

Beijing began to export its own HSR systems overseas under the Belt and Road initiative in the last decade. Meanwhile, the Abe administration since 2012 has promoted the shinkansen overseas as a countermeasure to balance China’s geopolitical influence. Prior to the 2010s, Japan only exported the shinkansen once, to Taiwan in 2007. For its proponents, the shinkansen’s safety record, high efficiency, and other excellent performance measures justify its higher cost compared with the Chinese HSR.

With regard to Sino-Japan HSR competition, Southeast Asia is the main battlefield.

In the mid-2010s, several serious Sino-Japan HSR matchups occurred, in Thailand, Indonesia, Malaysia and Singapore.

Probably due to ample financial support, flexible approaches to engaging host countries, and relatively cheap prices, Beijing took the upper hand over Tokyo by securing three projects, versus Japan’s one. The three Chinese HSR projects include Bangkok-Nakhon Ratchasima (then Nong Khai) in Thailand and Jakarta-Bandung in Indonesia, currently under construction despite some delays, and another route between Bangkok and Rayong that is in the planning stage.

In contrast, Japan’s only HSR project, between Bangkok and Chiang Mai, has not moved beyond negotiations due to financial disagreements.

Although geostrategic considerations make Vietnam inclined to favor a Japanese HSR project, the second HSR proposal this year, after a rejection in 2010, may not be promising due to the high cost and long construction period.

In the meantime, Japan’s conventional rail projects, ranging from mass rapid transit, commuting trains to upgrading existing networks, have been successful in Southeast Asia.

Among various projects, the recently settled deal for the Jakarta-Surabaya line upgrade could be particularly important. With a total length of 730 km, Indonesia’s original plan on the line was for HSR, but it has been changed into an upgrade of the existing a narrow-gauge (1.067-meter) conventional route after bilateral negotiations.

Despite the narrow gauge, upgraded tracks with better conditions are planned to raise the top speed of the trains to 160 kph, and it will reduce travel time by about half compared with current services. The upgrade project will also demand less land acquisition, a significant challenge for infrastructure in Indonesia, apart from the lower costs compared with an HSR project.

Compared with flamboyant HSR systems, such low-profile projects generate less media coverage, but focusing on them may suit most developing countries in Southeast Asia and other regions better for several reasons.

The lower costs would benefit host countries by creating a lighter financial burden and thus be less likely to turn into a debt trap.

Next, the full potential of the existing infrastructure could be utilized. The conventional rail networks in Southeast Asia are either at meter gauge (1 meter) or cape gauge (1.067 meters), and there is still significant room for them to be modernized based on their present condition, which includes a lack of auto-block systems, no electrification, single track and other features for improvement.

Thus upgrading would optimize their capacity at a lower cost and broaden connections with established networks compared with building a separate HSR system based on the standard gauge (1.435 meters). This would help existing systems mature, promoting development and economic growth that could later be turned toward implementing HSR systems. This was Japan’s experience in developing rail transport.

In fact, the Japan International Cooperation Agency has conducted such relatively small rail projects overseas for decades, but such efforts are usually categorized as international cooperation instead of as aspects of geopolitical policy. They do not look like a counterpoint to China’s HSR diplomacy.

Despite the high economic potential in Southeast Asia, the Singapore-Kuala Lumpur HSR project was postponed for financial reasons. This effectively cooled the region on HSR.

The uncertain situation of the global economy in recent years has further increased doubt about the financial feasibility of big-ticket infrastructure projects, including HSR. As such, focusing on conventional rail projects may substantially advance domestic and regional connections more than HSR.

Of course, the Chinese rail industry also has the capacity for such upgrades and other work on narrow-gauge railways, as evidenced by the well-known Tanzania Railway built by Chinese contractors in the 1970s and the recent project for improving the Cambodian network.

However, in the face of the broad and high demand from the Belt and Road initiative, the standardization of various projects would be a key element for efficiency.

Since most Chinese rail networks are standard gauge, to replicate similar work in other countries would be important to retain the pace of development for the Belt and Road initiative. Rail projects under the initiative, except for those in the former Soviet countries, are mainly standard gauge. In Africa, including Kenya and Ethiopia, Chinese rail planners also ignore the existing meter gauge rail system with the potential of improvement and separately build standard gauge. As such, upgrading existing rail networks with a localized and tailored style is unlikely to be the mainstream under Belt and Road.

Changing Sino-Japan relations may also cramp the shinkansen’s place in Japanese rail diplomacy. After the Shinzo Abe-Xi Jinping summit last year, and the agreement to cooperate on infrastructure and the Belt and Road, there has not been a joint HSR project by Japanese and Chinese contractors.

But a confrontational approach may not be suitable for the relative atmosphere of detente.

To present an alternative or another paradigm with more practicability could be the new niche of Japan’s rail diplomacy, rather than direct competition with HSR.

Therefore, the shinkansen may step back to the list of various rail systems available from the Japanese rail industry. It does not mean the match of shinkansen vis-a-vis Chinese HSR for specific countries will not happen again, but it would be less frequent, as Japan and China would have increasingly distinct approaches to their railway diplomacy.

Shang-su Wu is a research fellow of the Regional Security Architecture Programme at the S. Rajaratnam School of International Studies, at Nanyang Technological University in Singapore.

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