Sino-Japanese competition is a crucial structural force for the stability of Southeast Asia and East Asia in general and infrastructure development in ASEAN is emerging as a new source of intensified rivalry between China and Japan. This paper aims to assess the ASEAN countries’ capacity to benefit from the Chinese and Japanese infrastructure investment initiatives, without having to sacrifice other strategic interests or cede too much influence to either benefactor. Based on Indonesia’s and Myanmar’s case studies, it argues that ASEAN countries are becoming proficient at playing China and Japan against each other to secure the best investment terms.
However, this state of balancing and hedging dynamics increases both opportunities and risks. On the one hand, it prevents China and Japan from establishing a dominant position in the region and makes them continuously engaged in regional governance. For ASEAN countries, it offers a great opportunity to enhance their infrastructure and boost economic development. On the other hand, it could have a negative impact on ASEAN indebtedness, connectivity, and integration, due to an eventual race to the bottom and irrational or technically incompatible projects being pushed forward.
In view of this, this paper proposes a conceptual framework for evaluating major factors contributing to positive and negative effects of this infrastructure competition and explores how China, Japan, and ASEAN countries can contain it to avoid a zero-sum rivalry and instead promote a cooperative competition for the overall benefit of all stakeholders.
Barbora Valockova, Nanyang Technological University, Singapore