When the Jakarta–Bandung high-speed rail opened in October 2023, it was more than a sleek train capable of reaching 350 km/h—it was a statement that China’s Belt and Road Initiative is no longer just a blueprint, but a force reshaping Southeast Asia. In less than a decade, Beijing has transformed isolated capitals into logistics hubs, tightened regional supply chains to China, and shifted the balance of influence in a region central to China’s grand strategy as a maritime and overland gateway. The main competitor for rail construction in the region, the traditionally dominant Japan, may appear at first glance to have been sidelined by China. This is far from the case. Countries in the region aren’t just choosing between China and Japan, they’re building complex pathways for infrastructure construction which reflect both China’s economic power and regional states’ desire for flexibility and autonomy.
Indonesia’s Jakarta–Bandung high-speed rail illustrates China’s newfound heft in the region. Both China and Japan submitted bids for the project, but Beijing won in 2015 by offering lower costs, faster construction, and no sovereign guarantees. Valued at about US$7.3 billion, it was built by a joint venture between Indonesian state-owned enterprises (SOEs) and China Railway International. Operating at a top speed of 350 km/h, it cut travel time from over three hours to just 40 minutes. Its opening in October 2023 made it Southeast Asia’s first operational high-speed line and a flagship for the Belt and Road Initiative. The Laos–China railway offers another clear example. connecting Vientiane directly to Kunming, with trains running at speeds of up to 160 km/h, the Laos-China railway cut freight transport times by more than half, lowered logistics costs by almost 40 percent, and turned Laos from a landlocked country into a “land-linked” transit hub. Passenger flows and cross-border tourism surged, making it a showcase for Chinese rail diplomacy across ASEAN.
China’s approach is simple but powerful: build fast, finance big, and attach minimal conditions. SOEs backed by policy banks like the China Development Bank offer quick, flexible loans — far easier to access than Japan’s highly conditional assistance. For lower-income ASEAN states like Laos and Cambodia, the choice is obvious: China delivers now, while others deliberate. This speed and scale have allowed Beijing to outcompete traditional players, including Japan, in headline projects.
But Japan is far from irrelevant. For decades, it was the undisputed leader of Asian railway diplomacy. Anchored in the Free and Open Indo-Pacific vision, Tokyo emphasizes quality, safety, and long-term value. Loans from JICA and JBIC come with strict feasibility studies, transparency rules, and risk-sharing mechanisms. Japan doesn’t just build tracks — it builds institutions and trust.
Thailand shows how ASEAN countries hedge between major players. Bangkok chose China for the 615-kilometer Bangkok–Nong Khai line, part of a route that could eventually connect to the Laos–China Railway. In February 2025, the Thai cabinet approved Phase 2 of the China–Thailand Railway to Nong Khai, with officials targeting operations around 2030. While Phase 1 has faced financing/design hurdles and heritage-site concerns, the Phase 2 approval materially advances the Kunming–Vientiane–Bangkok corridor. By contrast, the Bangkok–Chiang Mai line backed by Japan has moved more slowly after years of stop-start negotiations and debate over viability, underscoring Thailand’s practice of hedging across partners. At the same time, China and Cambodia highlighted significant railway cooperation in their April 2025 joint statement, which included plans involving the Phnom Penh–Sihanoukville and Phnom Penh–Poipet routes, aiming to strengthen links with Thailand and Vietnam, thereby reinforcing China’s role across the Indochina Peninsula.
Vietnam increasingly exemplifies a third path. In November 2024, the National Assembly approved a US$67-billion, 1,541-kilometer North–South high-speed rail and signaled a self-reliant financing approach that caps foreign borrowing, rather than tying the megaproject to either China or Japan. Concurrently, Hanoi has explored Chinese loans for the Lao Cai–Hanoi–Haiphong corridor, indicating partner diversification by function rather than alignment.
For China, this competition is both an achievement and a reminder. Speed and scale have enabled Beijing to secure breakthroughs in Laos and Indonesia, but they also expose the complexity of project implementation and the long-term challenges of financing and operations. Indonesia’s Jakarta–Bandung high-speed rail is now up and running, but its extension to Surabaya remains stuck in political and financial debates. Japan, meanwhile, continues to leverage its high quality, reliability, and institutional strength to maintain influence in countries like Vietnam and the Philippines.
Future competition will go beyond steel and concrete toward digital ecosystems. Smart ticketing, 5G-enabled operations, and integrated logistics platforms will define the next layer of influence. Whoever controls the data and standards behind these systems will secure deeper, longer-term dependencies. At the same time, Southeast Asia’s political cycles remain a critical variable: elections in Malaysia, Indonesia, and Thailand can reorder priorities overnight. Beijing must stay agile and adapt to shifting political and economic landscapes.
For Southeast Asian states, the calculus remains pragmatic. They will keep hedging: Laos will take China’s money for quick gains, Vietnam will seek Japan’s governance assurances, and Thailand will split deals to maximize leverage. ASEAN is not choosing sides; it is extracting the best offer. In this game, China must not only outbuild Japan but also outlast it, combining speed with sustainability, scale with trust, and hard power with soft influence. Speed may win contracts, but trust decides who stays. Only by achieving both can China’s railways become more than fast tracks — they could be the steel arteries of a shared future, even in an age where competition has become the new normal.
References
Associated Press. (2023, October 1). Indonesia set to launch Southeast Asia’s first high-speed railway, largely funded by China. VOA News. Retrieved June 8, 2025, from https://www.voanews.com/a/indonesia-set-to-launch-southeast-asia-s-first-high-speed-railway-largely-funded-by-china/7292450.html
Bangkok Post. (2023, March 8). Bangkok–Chiang Mai rail project gears up. Retrieved June 8, 2025, from https://www.bangkokpost.com/thailand/general/2523376/bangkok-chiang-mai-rail-project-gears-up
Geopolitical Monitor. (2017). Fact sheet: Kunming–Singapore high‑speed rail network. Retrieved March 2, 2021, from https://www.geopoliticalmonitor.com/fact-sheet-kunming-singapore-high-speed-rail-network/
Kratz, A., & Pavlićević, D. (2018). Norm-making, norm-taking or norm-shifting? A case study of Sino-Japanese competition in the Jakarta–Bandung High-Speed Rail Project. Third World Quarterly, 40(6), 1111–1130.
Liao, J. C., & Dang, N.-T. (2019). The nexus of security and economic hedging: Vietnam’s strategic response to Japan–China infrastructure financing competition. The Pacific Review, 33(1), 1–24.
Ministry of Foreign Affairs of Japan. (2023、 December). 目で見るASEAN―ASEAN経済統計基礎資料 [ASEAN at a glance: Basic economic statistics on ASEAN]. https://www.mofa.go.jp/mofaj/files/000127169.pdf
Ministry of Foreign Affairs of the People’s Republic of China. (2025, April 18).中华人民共和国和柬埔寨王国关于构建新时代全天候中柬命运共同体、落实三大全球倡议的联合声明 Retrieved from https://www.mfa.gov.cn/ziliao_674904/1179_674909/202504/t20250418_11596815.shtml
Nautiyal, S. (2024, August 1). Navigating turbulence: The South China Sea conundrum. SIS Blog, School of International Studies, Jawaharlal Nehru University. Retrieved June 8, 2025, from https://sisblogjnu.wixsite.com/website/post/navigating-turbulence-the-south-china-sea-conundrum
Sasada, H. (2019). Resurgence of the “Japan model”? Japan’s aid policy reform and infrastructure development assistance. Asian Survey, 59(6), 1063–1090.
Stepat, D. (2024, December 8). Vietnam’s $67 billion bullet train: A turning point for ASEAN connectivity? [LinkedIn post]. LinkedIn. https://www.linkedin.com/posts/david-stepat_vietnams-67-billion-bullet-train-a-activity-7269525918958657539-P0O1/
The People’s Map of Global China. (n.d.). Laos–China Railway. Retrieved June 8, 2025, from https://thepeoplesmap.net/project/laos-china-railway/
Wancharoen, S. (2024, February 27). Sino‑Thai rail link set for two‑year, B4 bn delay. Bangkok Post. Retrieved June 8, 2025, from https://www.bangkokpost.com/thailand/general/2748876/sino-thai-rail-link-set-for-2-year-b4bn-delay
Wang, H., & Peng, Z. (2022). 日本在东南亚的对华基建竞争——动因、演进与走向. 国际展望, (5), 104–117.
Yoshimatsu, H. (2021). Japan’s strategic response to China’s geo-economic presence: Quality infrastructure as a diplomatic tool. The Pacific Review, 34(3), 1–24.
Zhao, Hong. (2018). 中日对东南亚基础设施投资竞争及其影响 [Sino-Japanese competition in Southeast Asian infrastructure investment and its impact]. 国际论坛 [International Forum], 20(2), 39–54.
