The extending arm of China’s debt diplomacy

November 4, 2025

When Indonesia unveiled its first highspeed railway two years ago, the sleek “Whoosh” line symbolized a new era of modern infrastructure and closer economic ties with China. Connecting Jakarta to Bandung in just 45 minutes, the $7.3 billion project was meant to showcase Indonesia’s development ambitions under President Joko Widodo’s administration. Today, however, the once celebrated venture has become a source of financial anxiety, political scrutiny, and uneasy diplomacy.

The 145-kilometer line, built as part of China’s Belt and Road Initiative, is now at the center of tense debt negotiations between Jakarta and Beijing. With mounting losses and disappointing passenger numbers, the Indonesian government is seeking to restructure the project’s Chinese loans before they become unmanageable. The Weight of a Costly Partnership The “Whoosh” railway was designed as a joint venture between Indonesian and Chinese stateowned enterprises, with Indonesia’s consortium holding a 60 percent stake. But the financing structure tilted heavily toward Beijing’s support— three-quarters of the cost came from Chinese loans, all underpinned by state guarantees from Jakarta. What was once hailed as a triumph of bilateral cooperation is now viewed by some policymakers as a cautionary tale.

Investment Minister Rosan Roeslani has confirmed that the government is seeking a “comprehensive” restructuring to prevent a potential default. “We are looking at all options to ensure the project remains sustainable,” he said. Indonesia’s newly formed sovereign wealth fund, Danantara, is leading the talks. Its Chief Operating Officer, Dony Oskaria, said the negotiations focus on extending loan periods, lowering interest rates, and addressing currency risks. Officials expect an agreement with China by the end of the year. Losses Mount, Passengers Stay Away Behind the diplomatic language lies a stark financial reality. The “Whoosh” line has failed to attract enough passengers to cover operating costs.

Despite its cutting-edge speed and comfort, the train’s high fares and inconvenient station locations have discouraged daily commuters. The cheapest one-way ticket, at Rp250,000 (about $15), costs more than five times the price of the conventional train. Lawmakers say passenger numbers are barely one-third of initial projections. As a result, the Indonesian consortium reported a loss of nearly Rp4.2 trillion ($253 million) in 2024, followed by another Rp1.6 trillion in the first half of 2025. Bobby Rasyidin, CEO of the largest Indonesian stakeholder, described the project as a “ticking time bomb.”

The financial strain has reignited debate over the decision-making that led to China’s selection as the project partner. Japan had originally offered to build the line with an interest rate of 0.1 percent, compared with China’s 2 percent offer. But Beijing’s proposal did not initially require state guarantees, which helped it win the contract. When costs ballooned during construction, however, Jakarta was forced to provide those same guarantees—exposing the government to the debt risk it had sought to avoid. Beijing’s Steady Support China, for its part, continues to back the project publicly. Foreign Ministry spokesperson Guo Jiakun said Beijing remained committed to the “Whoosh” line, emphasizing that its value should not be judged solely by financial metrics. “Beyond profitability, the project delivers public benefits and comprehensive returns for both countries,” he said.

For Chinese officials, the railway represents an important Belt and Road success story in Southeast Asia. But analysts note that Beijing’s options are limited. While China could theoretically assume control of the project if Indonesia fails to meet repayments, such a move would be politically fraught and economically unattractive, given China’s own domestic financial pressures. Most observers believe a more pragmatic solution— such as a temporary suspension of payments or a loan extension—is likely. This would give Jakarta breathing room while allowing Beijing to preserve diplomatic goodwill and regional influence. A Symbol of Ambition and Caution From the beginning, critics questioned the need for a high-speed connection between Jakarta and Bandung, cities separated by just 145 kilometers.

The line’s backers argued it would stimulate investment and tourism, but detractors warned that the economics never made sense.Now, as Indonesia faces the consequences of those decisions, the “Whoosh” project has become a test case for the long-term sustainability of Belt and Road infrastructure ventures. For President Widodo’s government, it also poses a delicate political challenge: balancing the desire to maintain ties with China while managing public concerns over debt dependence. The high-speed train still runs every day between the two cities, gliding smoothly past the crowded highways it was meant to replace. But beneath its polished surface lies a sobering truth. What began as a showcase of progress has become a study in overreach—a lesson in the risks of grand ambition when the economics do not stay on track.