New Railways Could Transform Southeast Asia

Via The Economist, a look at new railways that could transform South-East Asia:

Few better ways exist to see Vietnam than to travel on its north-south railway. It was originally built by French colonialists, and its trains pass rice paddies, verdant mountains and spectacular coastlines as they go from Hanoi, the capital, to Ho Chi Minh City. However, the trains move at a leisurely 30 miles (50km) per hour. Rather than spend 36 hours on the train, most people take a two-hour flight.

All across South-East Asia railways are old and slow, and tend not to connect with one another. The region has only 24,000km of railway lines—roughly the same as Mexico, which has a land mass half its size. For decades bigwigs at the Association of South-East Asian Nations, an intergovernmental forum that aspires to increase trade, have talked up the goodies that might flow from laying a lot more track. Wheels are slowly starting to turn.

Map: The Economist

One accelerant has been the completion, in 2021, of a semi-high-speed line from Kunming in southern China to Vientiane in Laos. The idea for a long time has been that this could become the first stretch of a line that would run all the way to Singapore (see map). Its inauguration has generated momentum elsewhere, says David Lampton of Johns Hopkins University. Thailand has said it is speeding up construction of a high-speed railway into Laos; Malaysia is reviving long-stalled plans to build a $25bn line south to Singapore; Vietnam has just announced plans for two railways that will run from Hanoi to the Chinese border. Last year Indonesia launched its first high-speed service between the cities of Jakarta and Bandung.

To expand their networks, South-East Asian countries need expertise and money. China is offering both. Though it now talks much less than it did about its Belt and Road investment initiative, China remains by far the biggest foreign provider of finance for South-East Asian infrastructure. As of 2022 it was involved in two dozen of the region’s 34 biggest projects (those costing more than $1bn), reckons the Lowy Institute, an Australian think-tank. Six of them, equivalent to 60% of total commitments, were railways.

Foreign fields are attractive to Chinese rail companies, which have mostly finished rigging up their own country’s high-speed network. And South-East Asia is a particular priority for the government. Improving freight there would benefit Chinese companies that are moving factories to the region. Last year Chinese firms coughed up a third of all the foreign investment that went into South-East Asia’s manufacturing sector, up from 18.5% in 2019.

Delays doubtless lie ahead. Infrastructure projects that are backed by China tend to fall through a lot more often than others, notes the Lowy Institute. It reckons that between 2015 and 2021 only a third of the funds China said it was committing to infrastructure in South-East Asia actually ended up flowing into something that got finished. This is in part because China likes to get involved in the most ambitious projects, which are most vulnerable to slippage or downsizing. But it is also because big Chinese investments are controversial, and tend to get re-examined when governments change.

A Chinese-backed rail line that is due to connect Malaysia’s east and west coasts has caused no end of rows since it was announced in 2016. Its plans have been reconfigured several times. Last year the Philippines, which has only a few hundred kilometres of railway, said it would no longer seek Chinese help to construct three new rail lines (fear of getting in hock to China, and anger over disputes in the South China Sea, may have played a role). Yet it insists it has other options: officials said they would instead seek funding from India, Japan or South Korea. Perhaps one day South-East Asia’s stunning vistas will whizz past travellers—in the blink of an eye



This entry was posted on Friday, October 11th, 2024 at 4:13 am and is filed under China, Laos, Thailand, Vietnam.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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