On Track Economic Belt

By Yuan Yanan, Zhu Mengxiao

In 2015, Chinese President Xi Jinping and Indonesian President Joko Widodo exchanged visits and signed agreements on jointly building the Jakarta-Bandung High-Speed Railway (HSR).Eight years later, the rail project is attracting global attention with all systems ready for commercial operation.

The first high-speed rail in Indonesia and even Southeast Asia, the Jakarta-Bandung HSR is poised to not only facilitate infrastructure development and logistics improvement in Indonesia,but also provide strong momentum for construction of an economic growth belt along the route, creating new opportunities for the development of upstream and downstream industries.

Overcrowded Hub

Indonesia is the world’s fourth most populous country. With the most developed economy and highest population density of Indonesia, Java is home to the country’s biggest cities such as Jakarta, Surabaya, Bandung, and Semarang as well as major industrial,commercial, and tourist cities such as Yogyakarta and Bogor. Java is considered the most crowded island in the world.Its permanent population is 145 million, accounting for nearly half of the country’s total. Data published by BPS-Statistics Indonesia showed that in 2021, the Java region, which represents only 7.25 percent of Indonesia’s land area, contributed 57.89 percent of the country’s GDP.

An official stands near a high-speed train during a test run at Halim station in Jakarta, Indonesia, on September 18, 2023. (ACHMAD IBRAHIM)

The population concentration has brought development opportunities to the Java region, but challenges like traffic congestion and unbalanced regional economic development accompanied it. By the end of 2020, the length of expressways across Indonesia reached 2,346 kilometers, accounting for only 0.7 percent of the country’s total highway mileage. As of the end of 2021,the total length of Indonesia’s railroads in operation was about 6,466 kilometers,and the electrification rate was only 11.4 percent. The operating length of existing railroads in Java, where the Jakarta-Bandung HSR is located, is 4,537 kilometers, about 70.2 percent of the country’s total.

Indonesian novelist Seno Gumira Ajidarma once wrote that the average Jakartan spends ten years of their life in traffic. Indeed, traffic congestion is already a pressing issue to be addressed in Jakarta and even the Java region. Chen Weiru, a Chinese student studying in Indonesia, said vehicles and ships are the primary means of transportation in Indonesia but described traffic jams as “normal” in Jakarta. She said that during important festivals such as Eid al-Fitr,the roads between Jakarta and Bandung are so congested that it can take nearly a full day to complete inter-city distance of just a hundred kilometers.

The railway connecting Jakarta and Bandung before the construction of the HSR was built more than 100 years ago. Its outdated technical standards,aging equipment, and irrational routing through the city center combined to result in an uncomfortable, dragged-out travel experience due to a slow speed of only 50 kilometers per hour.

The backward railroad facilities and slow train speed led to inefficient logistics in Indonesia, said Luo Yongkun,deputy director of the Institute of Southeast Asian and Oceanian Studies at China Institutes of Contemporary International Relations. Indonesia’s logistics index is only higher than that of Laos and Cambodia among ASEAN countries, making logistics a major factor hindering the country’s economic development.

Meanwhile, Jakarta has been grappling with expensive real estate, conflicting plans, and other issues commonly seen in big cities experiencing diversification. It has recognized a dire need to spread its advantageous resources such as capital and talent around to neighboring areas,and the tourist city of Bandung is a favorite for many Jakartans seeking an escape from hectic urban life.Construction of a high-speed railway connecting the two cities will expand the flow of people and resources and promote the economic progress of Indonesia.

HSR-based Economic Belt

After completion, the 142.3-kilometer Jakarta-Bandung HSR, with a maximum design speed of 350 kilometers per hour,will shorten the travel time between the two places from over three hours to 40 minutes.

The Jakarta-Bandung HSR will effectively save travel time, alleviate traffic congestion in Jakarta and surrounding areas, and facilitate population mobility. According to Li Hongchang, a research fellow at the Center for Sustainable Transportation Innovation and vice president of the Research Institute for National Transportation Development at Beijing Jiaotong University, the Beijing-Tianjin,Tokyo-Osaka, and Paris-Lyon intercity high-speed railways have already proved their value in terms of driving the economy with a local “one-hour commuting circle.” Accelerated flow of talent, information, capital, and other factors results in a “siphon effect” on surrounding small and medium-sized cities, according to Li, which will help form a city cluster radiating from big cities, drive industrial upgrading of cities along the line, and unlock the full economic potential of Jakarta, a megacity of 10 million people.

Li Hongchang called high-speed rail a “poly system” capable of driving upstream and downstream industrial chains to develop simultaneously to eventually form a high-speed rail-based economic belt. Construction of the Jakarta-Bandung HSR alone requires a huge industrial chain that involves technology research and development upstream, construction engineering and equipment manufacturing midstream,and operation maintenance and valueadded services downstream. All sectors of this industrial chain, whether based on Java Island or in other parts of Indonesia, will achieve development to varying degrees.

Xia Qingjie, chief accountant on the Jakarta-Bandung HSR project for Chinese construction company Stecol Corporation, told People’s Daily that the rail project can stimulate development of relevant sectors such as processing,manufacturing, infrastructure, electric power, electronics, services, and logistics in Indonesia, accelerate the transformation and upgrading of the industrial structure, and inject new impetus into economic development.

The Jakarta-Bandung HSR is also expected to drive the development of many industrial parks along the route,promote cross-regional allocation of various resources, create jobs, attract investment, stimulate development of new industries, and produce a spillover effect of economic agglomeration by integrating the markets of Jakarta,Bandung, and neighboring cities.

Two Indonesian construction workers give a thumbs-up to Chinese technology at Tegalluar EMU Depot of the Jakarta-Bandung High-Speed Railway in Bandung, Indonesia, on June 27, 2023. (VCG)

Passengers riding in business class of the Jakarta-Bandung highspeed train pose during a week-long public trial phase in Bandung on September 17, 2023. (YASUYOSHI CHIBA)

Perhaps the most visible economic effect will be increased employment,said Luo Yongkun. Statistics from China State Railway Group Co., Ltd. (China Railway) showed that construction of the Jakarta-Bandung HSR adopted a Chinese-Indonesian employee ratio of 1:4, which reached 1:7 at the peak,creating a total of 51,000 local jobs.Furthermore, considering “technology localization” important, China Railway provided training sessions on skills such as welding, electric engineering,machinery, and concrete pouring attended by 45,000 Indonesian workers.When put into operation, the railway will bring 30,000 new jobs annually in passenger service, equipment maintenance, and related supporting industries.

Bandung and West Java have the largest domestic tourist market in Indonesia with close to 120 million movements of tourists per year, reported Indonesian Tourism and Creative Economy Minister Sandiaga Uno in an interview with Xinhua News Agency,calling the Jakarta-Bandung HSR a major addition to current infrastructure.Luo Yongkun also mentioned that the railway will boost lodging, catering,retail, and other tourism-related sectors and create even more job opportunities for Bandung which, as a tourist city,still has considerable potential to be developed.

Homemade Indonesian raw materials such as steel and cement as well as telecommunications, signaling,power, electrical, and machinery equipment were widely used in the railway construction, with a total procurement amount of US$5.12 billion. Wang Kun, head of the Jakarta-Bandung HSR project management department of China Railway, told Global Times that more than 60 percent of the procurement came from local suppliers, which significantly fueled the development of the local industrial chain while also introducing China’s experience and equipment capacity to the upstream and downstream contractors in Indonesia.

Luo Yongkun thinks that Chinese efforts to spread high-speed rail technology and experience in Indonesia can help expand infrastructure development eventually, but he stressed that the economic effect of the railroad should be viewed from a long-term perspective. He identified improving people’s income and consumption level to stimulate economic vitality as most fundamental.

Li Hongchang concurred, predicting that the economic effect of the HSR could take at least five to ten years to develop. He forecast an expanded role of the railway as a critical lifeline of the national economy. “This is a gradual process that cannot be achieved overnight,” he noted. “It should align with the economic and social development of Indonesia.”

Paradigm of Connectivity

The Jakarta-Bandung HSR is the first high-speed railway in Indonesia and even in Southeast Asia, as well as the first overseas construction project to fully utilize Chinese railway systems,technology, and industrial components.Its successful construction proves the advancement, stability, and applicability of Chinese infrastructure technology.

Construction of the railway has reference significance and a demonstration effect on further promoting the global expansion of China’s high-speed rail technology and boosting infrastructure cooperation between China and other Belt and Road countries, said Li Hongchang.

Construction of the Jakarta-Bandung HSR adopted a Chinese-Indonesian employee ratio of 1:4, which reached 1:7 at the peak, creating a total of 51,000 local jobs.

More than 60 percent of the procurement came from local suppliers, which significantly fueled the development of the local industrial chain while also introducing China’s experience and equipment capacity to the upstream and downstream contractors in Indonesia.

Completion of the project will make Indonesia the first Southeast Asian country to possess high-speed rail technology and management methods, which will help to strengthen Indonesian national pride and selfconfidence and enhance the country’s international influence.

In an interview with The Straits Times, Luhut B. Pandjaitan, Coordinator for Cooperation with China and Coordinating Minister for Maritime Affairs and Investment of Indonesia,emphasized the importance of the Jakarta-Bandung HSR, calling it a turning point in the modernization of Indonesia’s public transport system.

As this year’s rotating chair of ASEAN,Indonesia proposed to strengthen ASEAN as a center of world economic growth. The Jakarta-Bandung HSR,according to Luo Yongkun, will not only help Indonesia consolidate its central position as a major ASEAN country, but also propel the connectivity of transport and trade along the route.

Dwiyana Slamet Riyadi, president director of PT Kereta Cepat Indonesia-China (KCIC), a joint venture consortium of Indonesian and Chinese state-owned firms building and operating the Jakarta-Bandung HSR,told Xinhua in an interview that the project has been progressing smoothly from planning, implementation, and finalization to joint commissioning and is an outstanding example of bilateral cooperation between Indonesia and China.

Indonesia is an important pivot for the Belt and Road Initiative (BRI). To promote synergy between the Chinaproposed BRI and Indonesia’s Global Maritime Fulcrum vision, major cooperation projects such as the “Two Countries, Twin Parks” program and the Regional Comprehensive Economic Corridor were launched alongside several high-level infrastructure connectivity projects. The completion and commissioning of the Jakarta-Bandung HSR marks the relationship between the two countries reaching a new era of faster development that will advance the China-Indonesia community with a shared future to a new level.

A flagship project of BRI, the Jakarta-Bandung HSR will merge with the China-Laos Railway, the China-Thailand Railway, and the East Coast Rail Link of Malaysia to form a comprehensive Southeast Asian railroad network that will accelerate construction of the Trans-Asian Railway, facilitate infrastructure connectivity among countries along the Belt and Road and deepen cooperation between China and ASEAN countries.

As the Jakarta-Bandung HSR heralds the “high-speed rail era” for Indonesia,a new chapter of Southeast Asian connectivity is unfolding, said Luo Yongkun.