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The government of Indonesia tends to favor China to build the nation's first high-speed railway that will connect Jakarta and Bandung.
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The ‘battle’ between China and Japan over who will be awarded the contract to construct the high-speed and high-profile railway
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between both cities (worth approx. USD $5 billion) heightened.
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Delegacies from Japan and China have visited Indonesia to offer more competitive terms of their bids for the contract.
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Both Asian giants are eager to win the contract as, allegedly, both nations are competing
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for political and commercial influence in Southeast Asia's largest economy.
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to be built in Asia over the coming years (one example is the planned railway that is to connect Kuala Lumpur in Malaysia and Singapore).
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Both Japan and China claim to have the globe’s most developed high-speed train networks: Japan is ready to export its Shinkansen technology
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(a network of high-speed railway lines in Japan used by the high-speed bullet trains) to Indonesia, while China has its own technology.
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Japan has ample experience in the high-speed train industry as it started to develop its famous bullet train in the 1960s.
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China has less experience (it started to develop its first high-speed train service in the late 2000s) but has shown remarkable growth
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in recent years (the country now claims that over half of the world’s current 23,000 km of high-speed railway tracks is made by China).
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Analysts assume that Indonesia tends to favour China for this project because China’s proposal is less burdensome (financially)
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China offers an IDR 73.9 trillion (USD $5.3 billion) loan with a 50-year tenure and an interest rate of 2 percent in US dollars
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while Japan offers an IDR 60.1 trillion loan with a 40-year tenure at an interest rate of 0.1 percent in yen (with a 10-year grace period).
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Both nations also offer to establish a local factory in Indonesia that will manufacture components for the trains
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(raising the input of local content for the project while generating more jobs).
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It has also been speculated that Indonesia favours China for this project in order to maintain a balance between both nations
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with regard to the handing out of high profile infrastructure projects.
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Previously Japan had already been awarded contracts to construct Jakarta’s mass rapid transit (MRT) system
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as well as the nation’s largest (2,000 MW) coal-fired power plant in North Java
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(a joint venture between Indonesian coal miner Adaro Energy and Japan's Itochu Corporation and Electric Power Development Co Ltd).
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Ties between Indonesia and the two Asian giants are close as China is Indonesia’s top trading partner
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