China dominates headlines when it comes to financing and building railways, bridges, ports and dams around the world but, in its own backyard, Japan is funding the lion’s share, according to data gathered by Fitch Solutions.
Japanese-backed projects in Southeast Asia’s six biggest economies – Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam – are valued at $367bn, Fitch’s figures show, while China’s share is $255bn said the data seen by Bloomberg.
Fitch’s figures pertain only to projects at the stages of planning, feasibility study, tender and currently under construction, which Fitch categorises as "pending".
The two infrastructure powerhouses have been ramping up their investments; Fitch data from February 2018 put Japan’s spending at $230bn and China’s at $155bn.
However, Japan’s investment is skewed toward Vietnam, where pending projects worth $209bn comprise more than half of Japan’s total. That includes a $58.7bn high-speed railway between Hanoi and Ho Chi Minh City.
China has spread its investments more widely, although Indonesia is its main beneficiary, making up $93bn, or 36%, of China’s total in the six countries.
The biggest Indonesian project is the Kayan River hydropower plant, valued at $17.8bn, Bloomberg said.
Across all of Southeast Asia, 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.
Despite these large sums, they may be only scratching the surface. The Asian Development Bank said in 2017 that developing Asia will need to invest $26 trillion (PDF) in infrastructure between 2016 and 2030 – $1.7 trillion a year – if the region is to maintain its growth momentum, eradicate poverty, and respond to climate change.
Image: A train leaving Sai Gon station in Ho Chi Minh City (CC BY-SA 3.0)