China’s big belt and road plans for Southeast Asia hit a 10-year speed bump as ‘political side effects’ mount

Though belt and road projects have brought economic benefits, fears are growing that the gains will prove to be ‘marginal’ amid growing debt risks

Demand for infrastructure spending isn’t going away, analysts say – but the days of ‘paying lip service’ to local concerns in the region may be over

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Trains for the Jakarta-Bandung High-Speed Railway are seen at a depot in West Java on Tuesday. The 142km-long belt and road project is set to open soon. Photo: Bloomberg

Published: 9:30am, 24 Sep 2023

A decade on from its launch, China’s Belt and Road Initiative has not been the “transformational game changer” many in Southeast Asia were hoping for, analysts say, amid growing concerns over the “marginal dividends” and “political side effects” of engaging with Beijing’s multibillion-dollar connectivity push to grow global trade.

Chinese investments and construction contracts in the region – spanning Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Cambodia, Laos, and Myanmar – peaked at around US$31.8 billion in 2018, a Maybank report released in March found.

Some of the better-known projects are a 1,035km high-speed railway in Laos that opened in 2021, the soon-to-open 142km Bandung-Jakarta high-speed railway in Indonesia and the 665km East Coast Rail Link project in Malaysia that is still under construction.

A section of the East Coast Rail Link in Kelantan, Malaysia, is seen under construction in May. Work began on the belt and road project in 2017. Photo: Xinhua

Others still in the pipeline include Lanxang Culture Park in Laos, a power plant at Xinhai Industrial Park in Indonesia, the Upper Stung Tatay hydropower project in Cambodia and repair works on Myanmar’s Thatbyinnyu temple.

Disputes over land ownership, labour rights, corruption and environmental impacts have been some of the major points of contention with belt and road projects, according to an International Institute for Strategic Studies’ Asia-Pacific Regional Security Assessment released in June.

“Ethnic tensions have also arisen, with concerns sometimes voiced by local populations that Chinese workers on belt and road projects have received higher pay,” it said.

Nur Rachmat Yuliantoro, an associate professor of international relations at Gadjah Mada University in Indonesia’s Yogyakarta, said that even though belt and road projects had brought some economic benefits to the region, fears were growing about social instability and debt risks.