In the past few years, vicious geopolitical headwinds have been brought into play against China. In response to the perceived threat posed by the peaceful rise of China, the United States has practiced a comprehensive form of containment that is in many respects even tougher than its confrontational approach to the former Soviet Union during the Cold War.
One tactic has been to form Cold War-style blocs to isolate and contain China. But most of the members of the Association of Southeast Asian Nations (ASEAN) are trying to avoid taking sides in the rivalry between China and the US. In particular, Indonesia wants to have a free hand to shape its foreign policies according to its own strategic calculations.
We will now examine the impact of Indonesia’s independent and active policy (bebas aktif) on its major foreign relations, which is likely to offer a greater window of opportunity for further improvements to Sino-Indonesian political relations.
Indonesia established diplomatic relations with China in 1950. During the heyday of the Sukarno administration, China and Indonesia enjoyed close relations. Partly because of the perceived close ties between China and the Communist Party of Indonesia (PKI) and partly because of the alleged loyalty problem with ethnic Chinese in Indonesia, Sino-Indonesian relations deteriorated in the mid-1960s. As a result of the “September 30 Movement” of 1965 and the purge of the PKI, Sino-Indonesian diplomatic relations were suspended in 1967. Following the downfall of Sukarno, General Suharto introduced discriminatory policies toward ethnic Chinese, adding further complexities to Sino-Indonesian relations.
Nevertheless, both countries resumed diplomatic relations in 1990. Anti-Chinese riots erupted in Indonesia in May 1998 after the outbreak of the Asian financial crisis. Some human rights groups claimed that at least 168 Chinese-Indonesian women were raped during the disturbances (Far Eastern Economic Review, Asia 1999 Yearbook (HK: Review Publishing Co Ltd, 1999), p125). The then-Chinese foreign minister, Tang Jiaxuan, made a direct appeal to the Indonesian government, calling for the protection of Indonesian-Chinese communities. After Abdurrahman Wahid came to power in October 1999, he tried to improve the situation of ethnic Chinese in Indonesia. Since Joko Widodo became president in 2014, Indonesia has relied on economic diplomacy to enhance its national interests.
Bilateral investment between China and Indonesia has been proactively boosted by President Widodo and President Xi Jinping, leading to a surge in investment under China’s Belt and Road Initiative
Under President Widodo, Sino-Indonesian economic relations have witnessed a transition away from mere reliance on two-way trade. Bilateral investment between China and Indonesia has been proactively boosted by President Widodo and President Xi Jinping, leading to a surge in investment under China’s Belt and Road Initiative. Inbound investment from China, including Hong Kong, in 2019-20, ranked second after Singapore. Chinese investments in Indonesia have concentrated in the mining and energy sectors.
Indonesia’s infrastructure is one area of focus for Chinese investors. The biggest Chinese investment project is the Jakarta-Bandung high-speed railway. It’s also worth noting that Indonesia is shaping up to be a key part of the electric vehicle supply chain. Chinese electric vehicle maker Hozon New Energy Automobile said it would step up plans to develop a right-hand-drive electric vehicle with its Indonesian partner. With regards to the digital economy, Tencent has a data center in Indonesia to provide cloud computing services and industrial digital solutions. Huawei is also contributing to Indonesia’s digital infrastructure construction. CK Hutchison (HK) operates Indonesia’s largest container port at Jakarta through Hutchison Ports.
Through the Global Development Initiative (GDI), China has also indicated greater readiness to be a responsible major power that provides global public goods. Besides, the GDI’s eight focus areas are aligned with the ASEAN Community Vision 2025 and Indonesian development programs. To sum up, both countries seem to welcome the prospect of closer economic ties and the economic path ahead is strewn with golden opportunities.
We must understand not just the causes of the close economic ties between China and Indonesia but also how these ties are creating mutual incentives for promoting better political relations. Economists have traditionally been skeptical about economic diplomacy but, in some cases, it is the only way of promoting cooperation between countries divided by politics.
Indonesia’s strategic choice to improve its relationship with China can be viewed as part of its transition into the “balance of power” strategy. The pursuit of strategic autonomy and bebas aktif enables Indonesia to keep a safe distance from Sino-US rivalry. Though Jakarta still regards the US as a reliable security partner, it does not want to take sides in the Sino-US rivalry. President Widodo has repeatedly said that ASEAN cannot be any party’s proxy. In the eyes of Chinese strategists, other countries’ search for sovereignty and identity is incompatible with the formation of Cold War-style blocs and will instead result in a more fragmented, multipolar world in which China can take its place as a great power (China is Ready for a World of Disorder, by Mark Leonard, in Foreign Affairs, July/August 2023).
In the words of the former Australian prime minister Kevin Rudd, both the US and China know that Jakarta has the potential to become a critical swing state in the great game for strategic influence in the Asia-Pacific region (The Avoidable War, by Kevin Rudd (NY: Public Affairs, 2022)). Aware of the leading role of Indonesia in Southeast Asia and conscious of the fact that Indonesia is located across the vital Malacca and Lombok straits, Chinese strategists realize that a lot more can and needs to be done to strengthen China’s political relations with Indonesia.
It’s wrong to think that Sino-Indonesian relations are grounded on very solid foundations. Several dark clouds are hovering over Sino-Indonesian relations, including Jakarta’s fear of economic domination by China, resentment of Chinese investments because of perceived unequal terms, territorial disputes, the efforts of Australia and Japan to enhance economic ties with Indonesia, allegations of bad treatment of Uygurs in the Xinjiang Uygur autonomous region and a common perception among Indonesians that the US is a better security partner. China should be sensitive to these issues and make greater efforts to enhance bilateral relations.
Crystal Wong is a senior consultant of Li Kwok & Law and co-director of GPA legal affairs of Chinese Dream Think Tank.
Kacee Ting Wong is a barrister, part-time researcher of Shenzhen University Hong Kong and Macao Basic Law Research Center, chairman of Chinese Dream Think Tank.
The views do not necessarily reflect those of China Daily.
