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(Con): Alternatives

Japan makes more credit available than China

Mike Bird, August 2, 2019,, Wall Street Journal, Hitting the Gas on Japan’s Belt and Road

But the speed of the increase matters in Asia, where overseas credit for major projects often comes from either Japan or China. Though Beijing’s Belt and Road program has garnered far more headlines, Japan’s lending to its poorer neighbors is more expansive than China’s, and is growing more quickly. The Bank for International Settlements’ data doesn’t break down figures into currencies with as little international use as the Chinese yuan, which accounts for less than 2% of international payments, according to financial network Swift. But the bank’s nationality-based data showed Chinese bank lending overseas was up $45.75 billion in the first quarter of the year. Japanese lending rose $222.51 billion. The fact that Japan is able to lend overseas in its own currency—something China has struggled to replicate—is perhaps the most important factor. It makes it more likely that Japan’s borrowers will use Japanese contractors for major infrastructure projects. Japanese banks also don’t have a finite supply of yen in the way that Chinese banks have a finite supply of dollars. As long as borrowers are happy to receive yen, and the lending is financially viable, the sky’s the limit for Japanese credit in the rest of Asia

Counter-initiatives to BRI

Cavanna, July 2019,, Thomas P. Cavanna is a visiting assistant professor at the Fletcher School of Law & Diplomacy in the Center for Strategic Studies. He writes on U.S. grand strategy and U.S. foreign policy toward China and South Asia. He holds a French “Agrégation” and a Master’s degree and doctorate in history from Sciences Po. He was also a Fox Fellow at Yale. Dr. Cavanna is currently working on a book on the Belt and Road Initiative and U.S. grand strategy., Unlocking the Gates of Eurasia: China’s Belt and Road Initiative and Its Implications for U.S. Grand Strategy

Belt and Road could also lose momentum due to the alternative infrastructure projects that are emerging. In the last two years, Western countries have expressed growing concerns about China’s low governance standards in the context of their disillusionment over Beijing’s increasing protectionism, authoritarianism, and military assertiveness. The main alternatives to Belt and Road include Japan’s “quality infrastructure” blueprint, which would invest $200 billion over five years; the Indo-Japanese Asia-Africa Growth Corridor; the European Union’s Eurasia connectivity plan; and a revamped U.S. development finance agency with a $60 billion portfolio.77 This competition could hurt China’s endeavor given these countries’ strong expertise, economic firepower, and determination to work together. It could also create a healthy competition that would ultimately benefit recipient states and their local populations

Japan dominating the infrastructure race now

Bloomberg, June 23, 2019,, Japan still leads in Southeast Asia infrastructure race, even as China ramps up belt and road investments: report

Vietnam is by far the biggest focus for Japan’s infrastructure involvement. Photo: ReutersVietnam is by far the biggest focus for Japan’s infrastructure involvement. Photo: Reuters Japan is still leading the Southeast 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 largest economies – Indonesia, Malaysia, 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 Southeast Asia, as well as Japan’s dominance over China, despite President Xi Jinping’s push to spend on railways and ports via his signature Belt and Road Initiative…The Asian Development Bank (ADB) has estimated that Southeast 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, count only pending projects – those at the stages of planning, feasibility study, tender and currently under construction. Fitch data in February last year 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 in North Kalimantan, valued at US$17.8 billion. Across all of Southeast 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 Southeast Asian economies.