Abstract
After a decade of effort, China has established its geopolitical influence in Southeast Asia through its rail projects, which will grow further as more lines are completed. Chinese rail projects, especially those involving high-speed rail (HSR) systems, are and will be of considerable benefit to Beijing’s geopolitical ambitions, but their impact may be limited by lack of progress, lack of connection, and unstable situations in some host states. Further, although China is actively shaping the landscape of Southeast Asian rail, there are opportunities for Japan, China’s competitor with regard to infrastructure investment in rail systems, to explore.
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Since its launch in 2013, the Belt and Road Initiative (BRI) has become China’s primary foreign policy instrument around the world, including in Southeast Asia. By investing in infrastructure in foreign countries, the BRI deepens engagement between Beijing and its foreign counterparts through joint projects and other bilateral or multilateral arrangements. The BRI is a multi-dimensional strategy, including maritime, aviation, and cyber, but its land transport projects have the most geopolitical impact because they improve inland connections within the Eurasian continent (State Council, People’s Republic of China, 2015). They are not only unprecedented but also directly connect China with its partners and are less vulnerable to external intervention than sea transport. For their high efficiency over long distances, rail systems play a central role in the BRI, given that China has the world’s largest rail industry and is a leading supplier of rail technologies (Nikkei Asia). Large Chinese rail projects have been planned, are under construction, or have been completed in many Southeast Asian countries. Whether part of the BRI or not, these projects are reshaping the regional geopolitical landscape in Southeast Asia and beyond.
In Eurasia, Southeast Asia is the most important and favorable region covered by China’s BRI based on various strategic, technical, and economic factors. Originally driven by the Malacca Dilemma, which refers to China’s lack of alternative trade routes and exposure to naval blockades, the BRI has identified respective rail lines through Myanmar, Thailand and perhaps Malaysia to reach the Indian Ocean (Khan, 2019). Although access routes through South Asia offer further alternatives, the region is strongly influenced by India, a great power that has geopolitical concerns about China and refuses to join the BRI, creating impediments to China’s activities in the region (The Times of India, 2023). In contrast, Beijing is more likely to maintain its dominance or superiority over Naypyidaw, Bangkok, and other Southeast Asian governments, as there is no competing power in the region (Wu, 2021: 29–30). Russia, Central Asian countries, and Iran have a friendlier attitude towards the BRI, but the routes through these regions to reach the sea are much longer.
Technically, the original rail networks in Southeast Asia are less sophisticated and efficient than those in Central and South Asia. The conventional rail systems in most Southeast Asian countries are colonial legacies that are narrow gauged, either 1 or 1.067 meter. With the highest operational record of 160km/h (東洋経済, 2022), narrow-gauged trains cannot reach the speeds that would categorize them as high-speed rail (HSR). Further, owing to the Cold War, a lack of regional integration, and a lack of modernization, many Southeast Asian conventional rail networks are somewhat obsolete, with few or no international connections (Asian Development Bank Institute, 2015: 54, 107). As a result, the need to integrate new lines with the existing networks is low; instead, China suggests completely new systems for high speed. As a point of comparison, the broad gauges used in the former Soviet countries and Mongolia (1.52 meter), as well as South Asia (1.668 meter), have proven feasibility for reaching high speeds (The World Fact Book N.A.; Rail Tech 2021; Jain 2018). Speed may thus not be a sufficient reason to convert existing systems in Central and South Asia into the standard gauge of 1.435m used in China, whether for the whole system or key lines. In addition, re-gauging entire regional networks, rather than single countries, is too expensive to be feasible. As a result, to connect China with Kazakhstan, Mongolia, and Russia, or possibly Nepal and Kyrgyzstan (Asia-Plus, 2024; Simmons, 2024), and the broad gauged rail networks beyond, it is necessary to transfer cargo and passengers between trains of different gauges.
For China, connections with Southeast Asia are also economically important. The Chinese diaspora, geographic proximity, international production chains, and other factors contribute to growing economic ties between China and Southeast Asia, as evidenced by ASEAN ranking top among China’s trading partners since 2020 (Harada, 2020). China’s primary focus is, therefore, on extending its standard gauged rail networks to Myanmar, Laos, Thailand, Vietnam, and perhaps Malaysia, allowing smooth international rail services without a break of gauges.
Regional Overview
Rail connections—in particular freight services—to China are essential for its economic integration and for geostrategic reasons, such as access to the Indian Ocean. This paper therefore focuses on Chinese rail projects with the most geopolitical impact. This excludes certain rail projects and deals. For example, despite requiring large budgets, urban rail systems, also known as metro or subway, have little geopolitical impact as their linkage is limited, especially for China. Single deals of rolling stock and other components for existing rail systems would not create a strong geopolitical impact either, though Beijing has supplied a lot of rail assets to Southeast Asian customers.
Except for Brunei, all Southeast Asian countries either already are, or potentially will be involved in major rail projects with China. These projects can be divided into three groups according to their connection with the Chinese rail networks. The first group includes Laos, Myanmar, Thailand and Vietnam, which have current rail projects or have completed ones directly connecting them with China. The second group is Cambodia, Malaysia, and Singapore, which have current or future rail projects which could connect them with China. The third group includes Indonesia and the Philippines, which are isolated from the Asian continent due to their archipelagic environment and thus have no connection with China in the foreseeable future, but Chinese investment there still generates geopolitical impact.
In the face of Beijing’s massive promotion of rail projects, Tokyo’s influence in Southeast Asia has been undermined, evidenced in the loss of the HSR contract with Jakarta, but the former’s approach does not match all the needs of rail transportation in the region, and therefore leaves some opportunities for the latter to remain competitive in the new era. Sino-Japan rail dynamics are observed in Cambodia, Indonesia, Myanmar, Thailand, the Philippines, and Vietnam, and they are reviewed in the following sections of the paper.
Direct Connection
The first project aimed at rail connection between China and Southeast Asia can be traced back to the Singapore-Kunming Rail Link (SKRL), which was announced at the fifth Summit of the Association of Southeast Asian Nations (ASEAN) in 1995. It contained two routes, which would eventually merge in Thailand—one through Vietnam and Cambodia, and the other through Myanmar (ASEAN, 2012). However, in 1995, neither Beijing nor the ASEAN members had enough financial capital to proceed with this grand plan. Still, this plan inspired a series of related bilateral projects for standard gauged rail lines that were initiated in the late 2000s and early 2010s along three routes: Myanmar, Thailand via Laos, and Vietnam. These projects, which are in various stages of progress, reflect China’s advanced rail technology, enhanced financial capacity, and outward foreign policy, as well as the limitations or challenges in implementation.
The Myanmar route is strategically the most important and valuable for China due to its coastlines boarding the Indian Ocean, but it faces political and geographic difficulties. The rail line from Kunming then crossing the China-Myanmar border, through Mandalay to Port Kyaukpyu, is the backbone of transportation for the comprehensive China-Myanmar Economic Corridor (CMEC) (Topcu, 2020). The rail line is a brand-new project because Myanmar’s existing one-meter-gauged rail system cannot support the CMEC due to its lack of coverage, speed, capacity, and compatibility with the Chinese networks (Jane’s, 2022, p. 238). However, this project has been postponed twice, the first time in 2014 because of bilateral disagreements and the second time in 2020 due to the pandemic (Sun, 2014) (Rogers, 2023). Despite this, China has been building the section of the rail line within its territory for the connection (Railway Gazette International, 2022). It is likely that the HSR to the Indian Ocean will eventually be accomplished given that Myanmar’s Junta is internationally isolated and depends on Beijing more than ever before. However, the ongoing civil war and uprising in Myanmar suggests an unstable environment, which will impede this project’s progress, particularly where it passes through the areas of insurgency.
The central route to Thailand through Laos represents a greater consortium of interests than the Myanmar route. Thailand is the biggest economy in mainland Southeast Asia and therefore has more economic value for China than other countries in the region. In addition, a rail link to Thailand offers potential strategic access to its southwest coast and the Indian Ocean. Furthermore, the central location makes a rail line to Thailand an indispensable part of accomplishing the SKRL. Thailand maintains its meter-gauged rail networks with connections to Cambodia, Laos, and Malaysia, but the speed and capacity of the system are constrained by the gauge (Jane’s, 2022: 321–322). Therefore, Bangkok plans to build domestic HSR networks, which are centered on the capital (Ruane, 2021: 642). Before the narrow-gauged rail link from Thailand opened in 2009, Laos had no rail transport at all, and thus has been keen to obtain an HSR link with China and Thailand, in addition to highways and the Mekong River, to overcome the limitations imposed by its landlocked territory (Kuik, 2021, 222–223). Moreover, Laos is the critical point of connection as Thailand and China lack a common border.
Also begun in 2009, Beijing works bilaterally with both Vientiane and Bangkok for their respective sections, which are at different stages of progress. The political stability in Laos allowed the bilateral negotiations in 2009 to result in an agreement, construction and eventual completion of the rail link in 2021 (Kuik, 2021: 223–227) (Xinhua, 2022). In contrast, the Sino-Thai HSR project between Nong Khai on the Laotian border and Bangkok, which also appeared as part of separate bilateral discussions in 2009, has been tumultuous, with different proposals and various disagreements on conditions, such as total cost, loans, and land development, due to Thailand’s political instability and other factors (Kuik, 2021: 234–237). However, construction of the HSR line did eventually commence. It will be implemented in two phases, and full completion is scheduled for 2031 (Wancharoen, 2024). It must be noted that once these projects are completed, Beijing still has no rail access to the Indian Ocean in or through Thailand because a standard-gauged line from Bangkok southward has not yet started (Hua Hin Today, 2024).
Thailand’s other planned HSR lines with standard gauge may serve as a connection to China, but their development is not yet certain. Thailand has utilized Chinese technology to build another HSR line, which develops its East Coast Corridor and connects Bangkok to three airports. This line can be seen as an extension from the China-Laos-Thailand line, though with little geopolitical impact for Beijing, as it is a technology supplier and thus has less influence than the main contractor, the Thai Charoen Pokphand (CP) Group (Kuik, 2021: 233). In addition, this project may not include freight service, reducing the value of the connection for China (Clark, 2023). As for the HSR line from Bangkok to Chiang Mai, it will be built by a Japanese contractor, leaving the compatibility with the Chinese-constructed rail networks in doubt (Bangkok Post, 2023).
China’s rail connection with Vietnam is much more established, but also more constrained. At the beginning of the 20th Century, the French colonial regime built two one-meter narrow gauged rail lines from Haiphong via Hanoi to Yunnan and Guangxi, the two bordering Chinese provinces (Wu, 2020). The line to Guangxi was converted to the standard gauge for wartime military supplies in the mid-1960s (Chen, 2001: 222). Since Vietnam’s current rail network is mainly meter gauged, the direct services with China are limited to the Red River Delta (Jane’s, 2022: 323). Back in the 2000s, Hanoi had plans to upgrade the line to Guangxi and rebuild the line to Yunnan to the standard gauge (The Ministry of Finance Vietnam, 2007), but these projects have not progressed (Vietnam+, 2023). Despite Vietnam’s lukewarm attitude towards the BRI, bilateral cooperation on the rail sector continues, evidenced in Hanoi’s metro system using Chinese technology (Ferchen 2021: 254–255). Beijing and Hanoi have also discussed further developing from the two existing rail links, which both have HSR potential (Global Times, 2023) (VN Express, 2023). These two lines would support the two transnational economic corridors (Tran, 2023). China is upgrading the line in Guangxi and has converted the line in Yunnan to the standard gauge (Railway Gazette International 2014; Global Times 2023). In 2024, Vietnam became more active in pursuing HSR links to China, particularly the route between Lao Cai on the border to Haiphong through Hanoi, but actual progress in implementation has been limited (Thu, 2024). A major question is which system should be adopted for the north-south HSR between Hanoi and Ho Chi Minh City. There were indications that it was likely to be Japanese with some joint preparation, but warming Sino-Vietnam relations suggest a chance for China (JETRO, 2023; Vu, 2024). Triangular dynamics among Hanoi, Beijing, and Tokyo in the following years could be detrimental for the development of the north-south HSR project.
Potential Direct Connection
Rail projects in Cambodia, Malaysia, and Singapore may connect with China in the future if additional sections are built to fill the current gaps. Due to funding shortages, the Phnom Penh-centered rail networks only comprise two meter-gauged lines, which suggests a relatively low cost of re-gauging (Jane’s, 2022: 67–68). Cambodia plans to convert a line between Phnom Penh and the Thai border into standard gauge (Railway Gazette International, 2023a), and it may request China’s support for this, which opens the possibility of establishing a link to China through Thailand or Laos (Vanyuth, 2024). However, the re-gauging is still far from being realized, and neither Thailand nor Laos has substantially planned with Cambodia to extend its standard-gauged network to the Cambodian border. In short, Phnom Penh will not be integrated into Beijing’s Southeast Asian rail network anytime soon.
Despite its relatively modernized meter-gauged system (Jane’s, 2022: 232–233), Malaysia has planned several HSR and other standard-gauged rail lines within its territory and beyond. These include the East Coast Rail Link (ECRL) and the Kuala Lumpur-Singapore (KL-SG) HSR, which are both well known. The ECRL aims to develop the east coast of the Malay Peninsula, where the economy is less prosperous (Lim, Li, & Ji, 2022: 656). The KL-SG HSR may profit from competing with one of the busiest aviation routes in the world (BBC News, 2018). Both projects have experienced various challenges and fluctuated in terms of progress. The ECRL has now moved into the construction stage, in partnership with the China Communications Construction Company, with about two-thirds to be completed by 2024 (The Star, 2024). But the HSR to Singapore remains in the planning stage, as the technological supplier has not been selected yet (Channel News Asia, 2024). An obvious gap between the ECRL—and perhaps the KL-SG HSR—and China’s rail network is the missing connection between Bangkok and Kuala Lumpur. Although both Malaysian and Thai leadership have shown interest in bridging the gap with another HSR project, the lack of stability in southern Thailand and the long distance of 1500km mean higher costs than in other HSR projects (Wu, 2022). As both governments are occupied with other ongoing rail projects, they do not have much capacity left for this challenge. Furthermore, owing to the pandemic and economic turmoil, Beijing may not be ambitious enough to substantially support an HSR project between Bangkok and Kuala Lumpur at this time.
Beyond Connection
Separated from the Asian continent by the sea, Indonesia and the Philippines are beyond international rail connections, but still attract China’s attention in the form of rail diplomacy. The two archipelagic countries stand out for their geostrategic importance: Indonesia controls several major international straits, and the Philippines matters to not only the South China Sea, but also strategic position of northern Luzon regarding Taiwan. Manila’s permission of Washington’s military deployment would affect Beijing’s war against Taipei. Their rising economic weight and demographic growth, their ASEAN memberships, and other important factors demonstrate their significance to the BRI, and thus they are also included in China’s rail diplomacy. Beijing’s major rail projects in the two archipelagoes are unsurprisingly concentrated on the major islands—an HSR project in Java and several standard-gauged projects in Luzon and Mindanao.
The Jakarta-Bandung HSR has been a flagship project for China’s rail diplomacy, following Indonesia’s plan. Although Jakarta has built up an indigenous rail industry (INKA) (Antara, 2019), it still lacks the HSR technology to increase the speed on its rail networks; therefore, an external supplier was indispensable for the Jakarta-Bandung HSR. After a fierce competition between Japan and China, the latter won the HSR contract in 2015 (Otele, Lim, & Alves, 2022: 8–9) and, after some delays, the line entered into operation in 2023 (The Jakarta Post, 2023). In the future, China may extend the HSR line to Surabaya (Karyza, 2024), and Japan may be deterred by the need for technological compatibility with the Jakarta-Bandung HSR (Asian News Network, 2023).
Despite some early achievements, such as the first light rail system in Southeast Asia (Light Rail Transit Authority), the Philippines has neglected its rail sector since the late 1980s and has focused on highways, as well as dealing with political and economic turmoil. This led to the closure of two main rail lines in Luzon in 1988 and 1993, respectively (Philippine National Railways) (Railway Gazette International, 2023b). The original narrow-gauge rail network is limited and thus not a major obstacle for new rail projects, but funding is. During the China-friendly Duterte administration between 2016 and 2022, Beijing was expected to provide Manila with the Mindanao railway project, the Subic-Clark rail line and the long-haul south line in Luzon, but none has been realized (Cruz, 2022). After several attempts at renegotiation, the current Marcos administration gave up hope of Chinese funding in October 2023 and turned to other foreign funders, including Japan (Amojelar, 2023).
Evaluation and Prospect
As China’s rail diplomacy in Southeast Asia has progressed into the construction and operation stages, the advantages and disadvantages of its rail diplomacy have become apparent. Currently, major projects with geopolitical relevance to China are operational in Indonesia, Laos, and soon will be in Malaysia and Thailand. It is likely that others will be constructed in Cambodia, Myanmar, Singapore, and Vietnam. Beijing has demonstrated that its rail technologies can operate in foreign, particularly Southeast Asian, environments, showing China’s capability to adapt its civil engineering, signal, rolling stocks, and other related sectors to local conditions. That is, Chinese rail projects are not only affordable, at least for the time being, but also feasible. These completed and ongoing projects are likely to enhance the bilateral relationships between China and the host countries in the region. Joint ventures and other kinds of interactions through these projects will further enhance bilateral cooperation as the Chinese elements in the rail networks of hosted countries will only become more salient. Additionally, trade via rails, particularly raw materials and industrial sub-products for international production chains, naturally contributes to economic integration. However, Beijing’s rail card does not seem to be a game changer yet in terms of influence on Southeast Asia or meeting China’s national interests.
The weaknesses in China’s rail diplomacy are geostrategic accessibility and bilateral influence. Although the BRI originated in plans to bypass the Malacca Strait, no Chinese rail in Southeast Asia has achieved this goal yet, neither through Myanmar nor Thailand; so far, there is only a natural gas pipeline through Myanmar (Watt, 2013). Beijing’s slow progress can be attributed to the dynamic political situations in Bangkok and Naypyidaw; in contrast, its cooperation with Vientiane is efficient without any political upheaval during their bilateral cooperation (Kuik, 2021: 223). However, managing partners is unavoidable in foreign affairs, and the cases of Myanmar and Thailand imply that China lacks policy leverage and/or political will to ensure its geostrategic goals are fulfilled on its schedule. Since Bangkok has not started its southward HSR project and Naypyidaw has not carried out the rail line between Kyaukpyu and the Chinese border yet, Beijing still has much work to do with its partners to obtain rail access to the Indian Ocean.
China’s influence on host states can be analyzed from three perspectives: trade, dominance in transportation, and debt. Trade between the largest Asian economy and its respective Southeast Asian counterparts would be enhanced with additional direct lines of transportation. However, this impact could be limited to where the rail links are connected. Except for a route between Guangxi and Northern Vietnam, the rest are connected to Yunnan, one of China’s least developed provinces (Observatory of Economic Complexity, 2023). Despite Beijing’s various projects to develop the southern province, it will take years or even decades for it to grow enough economically to matter to Southeast Asia. Therefore, Yunnan is currently a midway for much of the trade carried by trains between China and Southeast Asia, and the rail networks remain more suitable for China’s inland destinations than for the economically developed coastal areas that are more accessible through sea transport. As China’s economic center of gravity still lies in the coastal provinces (The Economist, 2021), the growth of trade between Chinese inland areas and the countries in mainland Southeast Asia may be limited. Further, coastal provinces and other areas convenient to sealift only have limited types of cargo suitable for rail transport due to their perishable nature.
In addition, China’s rail projects are only recent and not comprehensive. Therefore, they are unlikely to dominate host countries’ land transport. Although those projects reflect demands made by the respective Southeast Asian countries, their existing transportation systems, whether highways, conventional rails, or rivers, prevent China from achieving a dominant position, not to mention a monopoly. For Myanmar and Vietnam, rail links with their northern neighbor cover only a part of their trade with China and are not critical for their domestic or foreign transport. In Indonesia and Thailand, the Chinese rail projects will coexist with narrow-gauged lines, which are less sophisticated alternatives. Malaysia has no route of land transport that exactly compares to the ECRL, but its highway network and existing narrow-gauged rail lines serve as alternatives, albeit less convenient for detouring. The only potential dominant project in the region would be the HSR through Laos, which offers unprecedented connection domestically and externally. In other words, Vientiane may experience some significant impacts if Beijing shuts down the HSR services or threatens to do so. However, the rail lines through Laos connected to Thailand form a trilateral relationship of operation, which reduces the leverage China has against Laos with its threat to cut services to the landlocked country. In short, it is unlikely that Beijing can coercively use rail projects for diplomatic purposes.
The debt trap from Chinese loans has been a major issue related to the BRI, but it may not be a common issue with China’s rail projects in Southeast Asia. For Southeast Asian countries of considerable economic sizes, such as Indonesia, Malaysia, Thailand, and Vietnam, a few rail projects may not be large enough to indebt any of these countries to the point of financial ruin. The cost of 7.3 billion USD for the Jakarta-Bandung HSR (Cai, 2023) would not be a major threat to Indonesia’s economy of 1.32 trillion USD GDP (World Bank, 2023). In comparison, Malaysia and Thailand carry a heavier financial burden with their Chinese rail projects (Railway Technology, 2021) (Lertpusit, 2023) (Bangkok Post, 2023), but it is still less than 5% of their GDP. Due to the bilateral connection, Vietnam may approach China for funding to convert the narrow-gauged line from Yunnan, and the economic impact on Hanoi would be similar to that on Kuala Lumpur and Bangkok, as the cost for upgrading the route to the border with Guangxi could be shouldered by the Vietnamese budget (Tri, 2023).
For Southeast Asian countries with less economic capacity, such as Laos and Myanmar, the costs of their Chinese rail projects are considerable. The expenditure on Vientiane’s HSR is nearly 40% of its GDP (Jones, 2022), which gives Beijing strong leverage over the landlocked country. If Naypyidaw agrees with Beijing to build the line to Kyaukpyu, this would cost more than 10% of Myanmar’s GDP, which is significant as well (Burroughs, 2020), particularly since the junta is internationally isolated and already dependent on China’s support for its intensive civil war (Table 1).
Table 1. China’s Major Rail Projects in Southeast Asia
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All values are in US Dollars. GDP pulled from World Bank Data, 2022.
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It is likely that from now on, China’s rail diplomacy will focus on completing the current and planned projects rather than adding new projects. Geographically, the most feasible routes between China and the Southeast Asian countries have been identified, leaving little space for additional projects. With China’s economic growth slowing down, domestic economic challenges and the gloomy global market could constrain the capacity and motivation of the Xi administration to promote more rail projects overseas, including in Southeast Asia. Regionally, national governments may not have the surplus financial capacity or political capital to build additional major rail proposals before current projects are completed. However, it would not be surprising to see a few undecided and pending projects eventually being taken up by Beijing. In short, China’s rail diplomacy is slowly but steadily strengthening its influence on Southeast Asia by completing projects and establishing direct services, mainly in Indochina, but there continue to be significant limitations on what this will mean for geopolitics in the region more broadly.
How Japan Could Respond
The impact of China’s rail diplomacy in Southeast Asia has affected Japan’s role in the region. Other than Beijing, Tokyo is the primary rail provider to Southeast Asia, and their competition is intense, as was observed in the 2010s with several projects in Indonesia, Malaysia, and Thailand. Unlike China, which gains its influence by building direct rail connections to Southeast Asia, Japan seeks to mitigate the former’s influence by promoting its economic ties with the region, which can be traced back to the initial stage of the Cold War. Although Beijing has secured more large-scale projects than Tokyo, the latter can respond in a more targeted way by focusing on the East-West Rail Link, modernizing narrow gauged networks, and implementing the North-South Commuter Railway in the Philippines.
The east-west links in Indochina and the modernization of narrow-gauged networks may allow Japan to express its advantages in the face of China’s diplomacy. In mainland Southeast Asia, the major rail projects involving Beijing have so far run along with the north-south direction, but the demand for the east-west axis may be even greater (Asian Development Bank Institute, 2015: 56, 79–80). Several gaps have been observed in Indochina’s rail networks with Vietnam and Myanmar, respectively, being unconnected with any other Southeast Asian countries. In addition, Vietnam may have security concerns regarding any China-related project to build rail connections to other Southeast Asian countries. Therefore, Tokyo would be a more acceptable technology provider to Hanoi (Raymond, 2021: 17). Myanmar is a dilemma for Japan. The Japan International Cooperation Agency (JICA) has worked there for decades, including on improving narrow-gauged lines, such as the Yangon circular line and the trunk line between Yangon and Mandalay (JICA). However, the coup forced JICA to stop all rail projects (Frontier Myanmar, 2023). Tokyo would like to conduct a project for the East-West Rail Link to connect Myanmar and other Southeast Asian countries, particularly Thailand, but the international criticism on cooperating with Myanmar’s junta and the ongoing civil war presents an obstacle. If faced with the difficult choice of whether to maintain its influence in Myanmar or protect its international image, Japan may choose the latter over the former.
Due to the scales of their networks, Indonesia, Malaysia, Myanmar, Thailand, and Vietnam are not likely to phase out their narrow-gauged networks but rather modernize them, as China would not fund such a large re-gauging of entire networks. With the majority of its rail networks being narrowed-gauged, Japan has ample companies that have technology for and experience in raising train speeds and modernizing through means other than complete re-gauging, such as upgrading signals and operational regulations. Since Thailand and Vietnam have not electrified their narrow-gauged lines, Japan may play a critical role in helping them reach this milestone. In addition, Tokyo may continue or expand its current policy of donating used narrow-gauged rolling stock to its Southeast Asian counterparts, such as recent donations of Kiha-40/48 and Kiha-183 diesel cars to Thailand and Cambodia (Railway Gazette International, 2024). Overall, upgrading existing systems is more economic and carries a lower financial burden. For example, Kenya chose to build a Chinese standard gauged rail system between Nairobi and Mombasa, rather than upgrading its existing meter-gauge rail line, but that created financial difficulties due to insufficient revenue (Soy, 2023). Similar worry occurs in China’s major rail projects in Southeast Asia. Although China could also provide the required rail technologies for Southeast Asian operators to improve their narrow-gauged networks, such as rolling stocks to Malaysia, Thailand and Vietnam, they seem to prefer to provide predominantly off-shelf products and solutions, which are usually for the standard gauge.
Due to its souring relationship with China, the Philippines is another great opportunity for Japan to develop rail projects. As previously mentioned, Manila’s limited narrow-gauged network means that it prefers to build brand new standard gauge systems, such as the ongoing North-South Commuter Railways (NSCR) between Clark Airport and Calamba (North-South Commuter Railway, 2023). The NSCR is the largest rail project in the Philippines in recent decades, and it would reshape the regional development of the national political and economic center in metropolitan Manila (Railway Technology, 2022). Through this, along with other metro projects in Manila, Japan has earned a reliable reputation in the archipelagic country. If the current trend continues, Tokyo has a good chance of obtaining Manila’s three rail projects—Mindanao, long-haul South, and Subic-Clark. The Subic-Clark route looks to open up a promising economic corridor, with investment from the United States (Beltran, 2024). However, it is uncertain whether Japan would take on the other two projects, either bilaterally or through the Asian Development Bank (Jose, 2024; Rosales, 2024).
Image: A lineup of JR East Shinkansen trains in October 2012 (Licensed under CC BY-SA 3.0)
Overall, although the shinkansen system has been a symbol of Japan’s rail technology, further exports after the completion of the Bangkok–Chiang Mai project may be limited due to competition from China. Tokyo’s unsuccessful bid for the Jakarta–Bandung project has demonstrated Beijing’s financial advantage, including price and loan terms. Unless Japan can develop a more attractive package than China, it will be difficult for it to obtain a new HSR project in Southeast Asia. To counter a bid by Tokyo, Beijing could similarly increase its offer, given that its authoritarian regime is more flexible than its Japanese counterpart in adjusting financial deals. As mentioned above, the HSR routes with the most potential in Southeast Asia have been identified and the KL-SG HSR and Vietnam’s North-South HSR, which have so far not been taken up by China, would be obvious opportunities for Japan. If the KL-SG HSR proceeds under a bilateral agreement, the Sino-Japanese competition from the late 2010s could be reignited. Beijing, with its goal of building the SKRL, would desperately pursue this project, and it would take Tokyo a lot of effort to even have a chance. It may be easier for Japan to win the bid for the north-south HSR between Hanoi and Ho Chi Minh City due to Vietnam’s geostrategic concerns about China, but the improving Sino-Vietnam relationship may signify a potential joint venture of HSR. If Tokyo is about to secure the north-south HSR project with Hanoi, the project’s long distance, slow progress, and loose schedule would lead to various challenges in negotiation and execution (Vietnam Net Global, 2023), likely much greater than the HSR between Bangkok and Chiang Mai. Finally, Japan’s economic challenges, such as the dropping exchange rate of the yen and inflation, may reduce its capacity and will for dealing with an expensive HSR overseas.
Conclusion
Due to either the BRI or previous efforts, China’s rail projects have slowly reshaped the geopolitical landscape in Southeast Asia. Although Beijing has utilized its huge financial and industrial capacity to secure a range of projects in the region, effectively eliminating competition from Japan, it has faced some obstacles, such as host countries’ political situations, the pandemic, and other geopolitical challenges. China’s rail projects will mostly be in mainland Southeast Asia, generally on the north-south axis according to the SKRL plan, and will progress at a medium or slow pace. China’s achievements indeed marginalize Japan’s regional role, but Beijing’s approach also leaves Tokyo some opportunities to exploit. Through careful management, Japan can remain influential in Southeast Asia despite China’s geopolitical weight.
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Shang-Su Wu is an assistant professor at the Rabdan Academy, Abu Dhabi, United Arab Emirates. He was a research fellow at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. He is the author of Military Modernisation in Southeast Asia after the Cold War: Acquisition, Retention, and Geostrategic Impacts (London: Routledge, 2024). His research interests are military modernization, Taiwan issues, railways, and international relations. Wu’s articles, commentaries and op-eds have been published in Asia Policy, Contemporary Southeast Asia, the Pacific Review, and Defence Studies, among others.
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