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China to win Indonesian high-speed rail project through own advantages

Editor: Li Kun 丨CCTV.com

08-24-2015 15:12 BJT

By Gu Jianjun, post doctorate of Central Compilation and Translation Bureau

Bidding for the Jakarta-Bandung high-speed rail project is now entering its final critical stage as Indonesia wavers over how best to maximize profits: China or Japan. Both have their own advantages in price and technology. 

Indonesian President Joko Widodo reshuffled his cabinet on August 12. Five ministerial posts were replaced including that of Rachmat Gobel,  trade minister who has close ties with Japan. Some media believe his replacement will affect Japan’s bid for the Jakarta-Bandung high-speed rail project. In fact, whether China can win the competition  depends on the broader cooperative prospects between China and Indonesia as well as China’s mature high-speed rail technology.

Dropping of pro-Japan trade minister irrelevant to high-speed rail project

Gobel, 52, graduated from Chuo University in Japan and is also the president of the Indonesia-Japan Friendship Association. Since the Indonesian President Joko Widodo assumed office in October 2014, Gobel has served as a channel for Indonesia-Japan relations. His replacement signals Indonesia’s dissatisfaction over trade and cooperation with Japan.

At the beginning of 2015, the Indonesian Industry Department proposed terminating the 2008 Indonesia-Japan Economic Partnership Agreement as the terms favored Japan, not Indonesia.

Statistics show that Indonesia’s exports to Japan grew 5-7 percent, while the annual growth rate of Japan’s exports to Indonesia was 17-25 percent. Today Indonesia’s trade deficit with Japan is $US 3 billion. Nevertheless before 2008,  Indonesia’s trade surplus with Japan hit $6.6 billion.

The replacement of several ministers aims to address domestic questions over governmental direction of the economy. Indonesia’s second-quarter GDP growth rate is 4.67 percent, the lowest in six years.

China’s advantages in bidding for the high-speed rail project

Firstly, economic and trade cooperation between China and Indonesia has broad prospects.

China’s 21st Century Maritime Silk Road strategy offers a focal point for integration with Indonesia’s grand maritime ambitions, providing more room for China and Indonesia to deepen pragmatic cooperation.

In 2014, China’s direct non-financial investment in Indonesia stood at $1.05 billion. By 2020, the value of Indonesia-China trade will hit $150 billion and investment volume will top $80 billion.

Secondly, China’s high-speed rail enjoys an unparalleled competitive edge. 

China’s high-speed rail has developed fast, with the longest operating mileage and the most comprehensive technology.

By virtue of this competitive edge in quality and cost, nearly 30 countries have discussed cooperating with China. Cooperation with Malaysia, South Africa, Turkey and Argentina has shifted from a simple product output model to an industrial chain output based on an economic model of product+service+technology+management+capital.

Thirdly, China has two super salesmen.

Chinese President Xi Jinping and Premier Li Keqiang have vigorously promoted China’s high-speed rail technology during their visits to other countries.

Xu Shaoshi, President Xi Jinping’s special envoy and head of the National Development and Reform Commission, met Indonesian President Joko in Djakarta on August 20, 2015 and submitted a feasibility study for the Jakarta-Bandung high-speed rail project. During his visit, Xu also met other Indonesian cabinet ministers for further communications.

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

 

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