Chinese and Indonesian state-owned companies Friday signed a $5.5 billion deal to build the first high-speed railway in Southeast Asia's top economy, after Beijing beat Tokyo to win the construction project.

The line will connect the Indonesian capital Jakarta with the mountain-fringed city of Bandung, some 160 kilometers away, and is a key part of President Joko Widodo's plans to attract investors.

Japan was long expected to build the railway but China entered the contest this year, and Tokyo's bid was rejected last month after a chaotic bidding process that infuriated the Japanese. On Friday the chairman of state-owned China Railway International, Yang Zhongmin, signed a deal with a consortium of Indonesian state companies to form a joint venture to build the railway, with construction set to start next year and the line to begin operating in 2019.