JAKARTA ¨C Indonesia picked China over Japan to build the country¡¯s first fast-train rail link because Beijing had the courage to provide $5 billion in loans without asking for guarantees, an Indonesian official said on Wednesday.

The two Asian giants had been battling for months over the high-profile contract to build a railway linking the Indonesian capital, Jakarta, with the textile hub of Bandung.

Indonesia initially envisaged a high-speed service for the 150-km journey but changed its mind last month, opting instead for a medium-speed train. Analysts have said whoever won the bid could be a front-runner for future rail projects in the region, including one linking Kuala Lumpur and Singapore.

President Joko Widodo¡¯s administration preferred China¡¯s proposal because it was less burdensome and promised a larger share of technology transfer than Japan. ¡°The government of China has courage not to ask for guarantees from Indonesia,¡± Gatot Trihargo, deputy assistant for the state-owned enterprises ministry, said Wednesday. ¡°While other countries like Japan and Germany request government guarantees, we cannot afford this because our budget is limited.¡±

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.

For Japan, the rail project is a difficult loss, particularly after last-minute efforts by Prime Minister Shinzo Abe to provide a better offer than China. ¡°The Japanese government still believes our proposal was the better and most feasible one,¡± a Japanese embassy official said. ¡°We were expecting transparency and fairness from the Indonesian government. We hope that in the future they will be more transparent and fair.¡±

Indonesia¡¯s national planning minister, Sofyan Djalil, traveled to Japan this week to break the bad news to Tokyo, but also lobby officials on other investment opportunities. ¡°There are many infrastructure projects, not just trains, and many opportunities for the Japanese government to build infrastructure in Indonesia,¡± said Indonesia¡¯s Presidential Chief of Staff Teten Masduki.