Source: International Trade Statistics 2001-2017 from http://www.intracen.org/itc/market-info-tools/trade-statistics/

Asian Giants and Western Powers Compete over Infrastructure Exports

Japan has been a front-runner in exporting its infrastructure development projects to Southeast Asian countries in the last decades with official development assistance (ODA). Japan’s infrastructure investment since the 2000s totaled approximately $230 billion, which outweighs that of China which summed up to $155 billion, according to BMIResearch. On the other hand, China announced the “One Belt One Road” initiative in 2013, which aims to connect China, Central Asia, and Europe through infrastructure construction and investment in transportation. According to statistics released by the International Trade Center, China still exceeds competing countries such as Japan, Germany and the United States in absolute value for railway and tramway exports. However, Japan has been increasing its transportation exports at an accelerating rate, with the government’s policy aimed at increasing Japans infrastructure-related exports target from 10 trillion yen in 2010 to 30 trillion Yen in 2020.

China relied heavily on ODA loans and trade as a means of furthering its influence, especially through the One-Belt-One-Road initiative. Although Japanese Prime Minister Shinzo Abe announced Japans willingness to cooperate with China and thus complement overall infrastructure investment in the One-Belt-One-Road region, there is also a competitive element in infrastructure development plans in the emerging markets.

Japan and the United States recently sought to cooperate on infrastructure development, such as liquefied natural gas (LNG), and thus increase their influence in the region. Japan could facilitate cooperation with the United States on technology between the two countries and strengthen its presence in global infrastructure development projects, especially in Southeast Asia. The above statistics indicate that Japanese cumulative investment in infrastructure development outweighs those of China, but China has recently been aggressively expanding its exports and investments. Such rivalry could prove to be beneficial as countries now have a choice between Chinese and Japanese investments.

 

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