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Japan pulls ahead in SEA infrastructure race

Japanese-backed projects in region valued at US$367b while China's tally stands at US$255b

Singapore

JAPAN is still winning the South-east Asia infrastructure race against China, with pending projects worth almost one-and-a-half times its rival, according to the latest data from Fitch Solutions.

Japanese-backed projects in the region's six biggest economies - Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam - are valued at US$367 billion, the figures show. China's tally is US$255 billion.

The figures underline both the rampant need for infrastructure development in South-east Asia, as well as Japan's dominance over China, despite Chinese President Xi Jinping's push to spend on railways and ports via his signature Belt and Road Initiative.

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The Asian Development Bank has estimated that South-east Asia's economies will need US$210 billion a year in infrastructure investment from 2016 to 2030, just to keep up the momentum in economic growth.

The latest Fitch figures, provided in response to Bloomberg, count only pending projects - those at the stages of planning, feasibility study, tender and currently under construction. Fitch data in February 2018 put Japan's investment at US$230 billion and China's at US$155 billion.

Vietnam is by far the biggest focus for Japan's infrastructure involvement, with pending projects worth US$209 billion - more than half of Japan's total. That includes a US$58.7 billion high-speed railway between Hanoi and Ho Chi Minh City in Vietnam.

For China, Indonesia is the primary customer, making up US$93 billion, or 36 per cent, of its overall. The prized project there is the Kayan River hydropower plant, valued at US$17.8 billion.

Across all of South-east Asia and 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 South-east Asian economies. BLOOMBERG