China-Japan Rivalry and Southeast Asian Renewable Energy Development: Who Is Winning What in Indonesia?

Abstract

Abstract:In recent years, China and Japan have increasingly competed against each other over infrastructure provision in Southeast Asia, their near abroad. Through an analysis of energy infrastructure provision in Indonesia, this article argues that Indonesia has benefited from Chinese and Japanese financial resources in providing energy to otherwise remote and isolated communities. However, Indonesia’s domestic interest groups and its political economic structure have promoted nonrenewable energy adoption at the expense of renewable sources. Indeed, Indonesia’s demand for nonrenewable energy has opened up opportunities for both Chinese and Japanese firms. While Chinese firms have definitively grown their market share in nonrenewable energy infrastructure, especially coal-fired power plants, so too have their Japanese counterparts. The emphasis on coal-fired power has not only hindered renewable energy expansion, but also led to ecological damage. Furthermore, several Indonesian private firms with long-standing interests in coal mining and processing have forged collaborative ties with the Chinese and Japanese firms to enter the business of operating coal-fired power plants, while securing a captive market for their coal supplies. These findings illustrate that China-Japan competition is more complex than commonly portrayed, in addition to raising questions about Chinese and Japanese claims of a “green” Belt and Road Initiative and Partnership for Quality Infrastructure, respectively.