China has won a contract with Indonesia to build a 150-km fast train rail link to connect capital Jakarta with the textile hub in Bandung.
Indonesian authorities have selected China’s proposal over those of both Japan and Germany, stating better technology transfer conditions and no requirement for guarantees as the major factors.
Japan in particular had high hopes for the deal, which is believed to give the winner an advantage in competing for any further rail projects in the region, including one linking Kuala Lumpur and Singapore.
"The government of China has courage not to ask for guarantees from Indonesia," Gatot Trihargo, deputy assistant for the state-owned enterprises ministry, told Reuters on Wednesday. "While other countries like Japan and Germany request government guarantees, we cannot afford this because our budget is limited."
China offered $5bn in loans without asking for guarantees to Indonesia as part of the bid to build the medium-speed rail link.
Indonesia originally envisioned a high-speed railway, but changed its mind earlier this month.
The high-profile contract is a victory for Chinese President Xi Jinping's "One Belt One Road" initiative to build a network of ports, trains and expressways to help expand trade, investment and influence in the region.