PART 3 : REGIONAL OUTLOOKS
SOUTHEAST ASIA
Southeast Asian states will need investment equal to 5 % of their GDP to cover infrastructure growth between 2016 and 2030 . Through the BRI , China can fill a critical funding gap - with strings attached .
BRI
' S PIVOT TO THE SOUTHEAST
China has targeted Southeast Asia as one of the central nodes of its Belt and Road Initiative , with projects such as the China-Laos high-speed railway , hydropower plants in Cambodia , and Indonesia ’ s first high-speed railway , connecting the cities of Jakarta and Bandung . This region ’ s growing markets , numerous manufacturing hubs and abundant natural resources offer Beijing considerable economic opportunities . The region also plays a key role in securing sea routes in the South China Sea and Strait of Malacca .
Chinese investments can also fill a critical funding gap for Southeast Asian countries , as funding through private investors and international financial institutions remains limited and falls short of the region ’ s demand . China has already made huge investments in Southeast Asian infrastructure .
BEIJING ' S INTEREST IN THE SEA
New infrastructure and an expanded maritime presence have allowed China to establish more secure sea lines of communication through the South China Sea and Straits of Malacca . These efforts include ambitious port projects in countries like Indonesia , Malaysia , Singapore , and the Philippines .
In Indonesia , Beijing has strived to accommodate Jakarta ' s domestic priorities with its BRI projects . For example , in 2015 , Indonesia chose China over Japan to build its first fast-train rail link connecting Jakarta to Bandung . Several Indonesian state-owned enterprises , in a consortium with China Railway International Co Ltd ., signed a $ 4.5 billion loan with the China Development Bank this past May . China is also investing $ 6 billion in Indonesia ’ s Tanjung Sauh Port on the island of Batam . In Malaysia , China is pouring $ 1.9 billion into the Melaka Gateway port along the strait ' s northern shore and the Kuantan port on the South China Sea .
Involvement with these countries provides China a strategic opportunity to shape the contentious maritime sphere in its interests , raising concerns that China would use the BRI as economic leverage to support its claims over disputed territories in the South China Sea . It is likely that the other claimant states would be constrained in their ability to challenge China if they are dependent on BRI investments .
9