The West Midlands Trains Limited (WMTL), a joint venture of Abellio UK, Mitsui, and the East Japan Railway Company (JR East) launched its first train from Birmingham on December 12, 2017. The WMTL covers rail networks between London and Liverpool, comprised of 551 rolling stocks and 170 stations on the lines with total length of 899 km. Before the WMTL, Japan’s first major foothold into British railways was at the supplier level, with Hitachi’s Class 395 electric multiple units from 2009. Although the two Japanese companies only occupy 29.9 percent of the WMTL share, they have stepped into the operational level.
Despite a lack of substantial geopolitical impact, Japanese railway management and operation in the United Kingdom has two symbolic meanings. First, Japan can use the projects in Britain to promote itself in railway projects elsewhere in the world. The U.K. was the country where the railway was invented, and its railway networks are still relatively advanced nowadays. A takeover of the existing sophisticated network would demonstrate Japanese rail contractors’ capability to integrate and adapt in a foreign environment. Thus, being rail operators in Britain would be a valuable credit for Japanese companies to justify higher costs compared to Chinese counterparts, as the latter have not achieved anything similar yet.
Second, as Beijing expands its rail projects in eastern Europe, such as Serbia and Hungary, Tokyo also progresses in another corner of the region. Since Europe is one end of the Belt and Road Initiative (BRI), a British rail network operated by Japanese contractors is of significance, especially given the recent freight service between Chinese and British cities.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Japanese rail companies’ footprints in Britain serve as an example to understand the characteristics of Japan’s rail diplomacy vis-à-vis the Chinese. The remote location in England would not significantly contribute to Tokyo’s geopolitical considerations. Plus, the British establishment would not leave much room for Japan to exert influence either. In addition, the U.K.’s pending departure from the European Union, or Brexit, means Japan would not benefit much from a potential extension into the European continent from the United Kingdom. Therefore, the British case displays the commercial orientation in Japan’s rail diplomacy.
In contrast, China’s overseas rail projects are more politically oriented, reflected in their locations, which are connected or potentially connectable with China’s own networks, in the name of the BRI. The Chinese rail projects in Africa, despite the low possibility of direct connection to the Eurasian BRI, are useful for transporting strategic resources and/or strengthening relations with host countries.
Undeniably, Japan’s rail projects in developing countries could be seen as political too, but Japanese practices are still different from the Chinese ones. Tokyo usually holds stricter financial conditions for loans than Beijing does, as evidenced in their competition for the Indonesian high-speed rail project between Jakarta and Bandung. In addition, Japan’s rail donation to developing countries is mainly composed of used trains retired from its major companies, such as the JR East and the JR Central, instead of sending new ones.
Based on the differences, the rail diplomacy competition between China and Japan will see divergent results. As long as capital is sufficiently available, Beijing will expand much more broadly than Tokyo in building up demand for its rail industry and extending the network. However, China’s efforts will be less sustainable than Japan’s once economic turmoil hits.
For Japan, the WMTL is not without risk. The JR East’s 14.95 percent share implies limited power for bringing the company’s management, technology, and other elements into rail operations. In other words, the JR East may not be able to achieve significant influence in the WMTL. Outside the WMTL, British regulations, culture, and other social conditions are distinct from the home base of the JR East. Unlike projects in Thailand and India, the JR East cannot establish systems from scratch, but will take over existing ones. It is possible that the Japanese contractor will prove unable to replicate its efficiency and other positive impressions in the foreign context. If a serious accident, such as the Grayrigg derailment in 2007, occurs, the damage to the reputation of the Japan’s rail industry could be serious.
Aside from operations, the sustainability of London’s policy could be another challenge. When re-nationalizing infrastructure reappears as a current political topic, a dramatic policy change after a major election is not impossible, particularly from a left wing administration. Therefore, whether the WMTL will prove a showcase for Japan’s rail diplomacy is uncertain.
Simultaneously, China has definitely learned something from the case of the WMTL, and it would be no surprise for the China Railway Rolling Stock Corporation (CRRC) to bid for a similar project in western Europe. As France and Germany are still major powers in the rail industry, their adjacent countries in west and north Europe mainly adopt assets and technologies from these two major sources. However, financial difficulties may give extra-regional actors certain opportunities to enter the French and German domain sphere. For instance, Deutsche Bahn (DB, the German railway) once expressed its interest in purchasing cheap Chinese high-speed trains rather than expensive Siemens products.
The WMTL temporarily let Japan take the lead ahead of China in the bilateral competition of rail diplomacy, but the real game is just beginning. Both JR East’s handling of the WMTL and the CRRC’s following moves will be the next step.
Wu Shang-su is a research fellow in the Military Studies Program of the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University in Singapore.