The Japan Overseas Infrastructure Investment Corp. for Transport & Urban Development (JOIN) recently announced its intention to invest $40 million in Texas Central Partners LLP’s proposed bullet train service. After receiving approval from the Minister of Tourism on November 21st, JOIN will aid Texas Central in adopting N700-I Bullet, a high-speed train technology based on Central Japan Railway’s (JR Central) shinkansen system. The project calls for building a 250 mile rail line connecting Dallas and Houston, which the bullet train could cover in about 90 minutes. Company officials expect to begin the train service in 2021.
Texas Central Partners is a private company that brings transformational projects to Texas by employing a market-led approach. JOIN is a public-private fund established by the Japanese government in October 2014 with the intention to support technology exports. It was created as part of the Japan Revitalization Strategy of June 2013, with the aim of enabling Japanese firms to participate in the global infrastructure market. In addition to JOIN, JR Central also recently announced that it was considering whether to take a financial stake in Texas Central Partners. Currently, JR Central has a “Lifetime of Service” commitment to support the project, but is not yet a financial backer of the new rail line.
Texas Central’s new project is just one of many instances of Japanese investment in the US. With $22.5 billion in new investments since 2014, Japan is the 2nd largest source of new investment after the Netherlands. In addition, Japan has the 2nd largest cumulative stock of FDI in the US after the United Kingdom, reaching over $370 billion in 2014. Japanese financial relations with Texas are also very considerable, with recent investments in the automobile, high-tech computing, energy efficiency, real estate, and other sectors. The railway sector in the US has also attracted investment from other Asian countries, with significant recent investments coming from China to develop a LA-Las Vegas high-speed rail line and a manufacturing facility in Massachusetts.
Raveena Ugale is a Research Intern at the East-West Center in Washington and a Senior at the George Washington University.