China and Japan's competition for commercial influence in Southeast Asia is heating up, with the next contest taking place on the Malay Peninsula. In the coming months, Singapore and Malaysia are expected to move forward on a joint high-speed rail project that will connect five cities between Singapore and Kuala Lumpur. The 350-kilometer (about 217-mile) line is a key part of the geographically fragmented region's broader integration goals and, like a number of other infrastructure projects in Southeast Asia, a priority for both Tokyo and Beijing.
The proposed high-speed rail between Malaysia and Singapore is particularly ideal. At about 350 kilometers in length, it would fall within the window in which high-speed rail is considered most competitive against air or road transit (between 200 and 1,000 kilometers). The new line would connect two major commercial centers with deep links in trade and business, making the corridor between them ripe for development and investment. Because Singapore itself is the entry point for much of the investment flowing into Southeast Asia, and home to the world's second-busiest port, better integrating it with its neighbors is central to the region's prospects.
But few countries in Southeast Asia have the resources or technology to complete this type of project alone. This fact, combined with the political appetite that many Southeast Asian capitals have for high-profile projects, opens the door to partnerships with external powers such as China and Japan. For both Beijing and Tokyo, regional rail projects hold considerable economic promise. Construction deals typically include public-private partnerships of broad consortiums, providing opportunities to an array of companies. They also create opportunities for Chinese or Japanese firms in other sectors.
The two countries' contest for Southeast Asia's railways is not always zero-sum, since their differing interests ensure that they do not compete with each other on every project. Nor are China and Japan the only competitors; European and South Korean firms routinely vie for rail-related contracts in the region as well. Nonetheless, the East Asian powers are uniquely positioned to regularly go head-to-head in Southeast Asia, and their recent clashes indicate just how their rivalry might play out.
