For China and Indonesia, a delicate balancing act for better ties

Beijing and Jakarta haven’t always had a smooth friendship, with domestic political dynamics being a major driver of Indonesia’s foreign policy
But China needs to navigate its relationship with Southeast Asia’s largest economy on new terms it has hitherto been unused to in dealing with Asia

Lynn Lee

Published: 12:00pm, 4 Sep 2020

Why you can trust SCMP

Indonesia and China marked 70 years of diplomatic relations earlier this year, but it has not been a smooth friendship.

It is only in the past two decades, after the fall of dictator Suharto in 1998, that relations have warmed, alongside Indonesia’s moves to remove discriminatory policies towards its tiny ethnic Chinese population.

Bilateral trade, investment and tourism have increased correspondingly. China is Indonesia’s largest trading partner and is technically its top source of foreign investment, although Singapore officially wears that crown because some funds are channelled through the city state.

But with domestic political dynamics being a major driver of foreign policy for the archipelagic nation of 270 million – and amid the efforts of Asean countries to manoeuvre around deepening US-China rivalry – there will always be inherent limitations to the extent of Jakarta-Beijing ties.

Indonesian President Joko Widodo stands on the deck of an Indonesian navy ship in the Natuna Islands in January 2020. Photo: Indonesian Presidential Office via AP

For Indonesian President Joko Widodo, this means striking a careful balance between welcoming Chinese investment and living up to public expectations of how Southeast Asia’s largest economy should interact with China. As former vice-presidential adviser and professor Dewi Fortuna Anwar put it in a paper last year, elite and public opinion over China’s rise are split.

Views of China as Indonesia’s most significant external threat have eased and it has been welcomed as a funder and business partner. But among security observers, suspicions over Beijing’s intentions – and questions over Indonesia’s economic reliance on China – persist and have fuelled the belief that Jakarta should take a more strident tone towards Beijing’s expansive maritime claims.

While Indonesia is not a party to the South China Sea dispute, it has clashed with Beijing on the issue of Chinese fishing ships entering its exclusive economic zone around the Natuna islands. China insists the area is within its nine-dash line claim.

China and Indonesia’s fruitful, complicated relationship 70 years on

Ordinary Indonesians have become anxious over increasing Chinese imports and have protested against Chinese workers that accompany large-scale investments for infrastructure, industrial and manufacturing projects.

Misinformation campaigns and hoaxes – conflated with lingering suspicions and discontent towards ethnic Chinese in Indonesia – have thrived. Last year, when fatal riots broke out after the results of the April presidential election, social media messages saying they were shot “by police from China” went viral.

While domestic polling conducted last year found that those who believe China is “harmful” to Indonesia or that Widodo, popularly known as Jokowi, is a “handmaid” of China are in the minority, the findings also showed that such perceptions had grown over the years.

These factors will continue to govern Indonesia’s ties with China even amid new opportunities arising from changing geopolitical realities and the coronavirus pandemic.

Workers at the construction site of the China-built Jakarta-Bandung high speed railway. Photo: Xinhua

Indonesia continues to battle a surge in coronavirus cases with social-distancing restrictions and depressed global demand hitting business and manufacturing activity. The economy recently contracted for the first time in more than two decades.

For Jokowi, who returned to power last year on the back of promises to boost social programmes and infrastructure to propel Indonesia towards developed country status, foreign investment has become all the more crucial to ensure he can leave behind a legacy when his current and final term ends in 2024.

For China, maintaining harmony with Indonesia, which has no formal security alliances with any country, is part of its ongoing efforts to keep ties with Asean on an even keel.

In Jokowi, Xi has found a pragmatic counterpart who prioritises domestic economic gains over diplomatic leadership.

Widodo, Xi look to strengthen China-Indonesia ties

On Monday, as he spoke to Jokowi, the Chinese President called for new areas of cooperation. Vaccine production was a “new highlight” in bilateral ties, he said, in reference to how US-listed Chinese drug maker has tied-up with Indonesian drug maker Bio Farma to produce at least 40 million doses of its potential Covid-19 vaccine for Indonesia by March next year.

Jokowi, according to a Facebook post after the call, made clear that public health and the economy would be priorities in Indonesia’s crisis-time approach to foreign affairs. He praised the green lane that Indonesia and China have for essential diplomatic and business travel.

But ongoing unhappiness at the return of mainland Chinese workers to staff mining operations in Indonesia’s resource-rich provinces has led to protests amid rising local unemployment, bringing to mind a point that Fortuna Anwar raised in her paper, published by Singapore’s Iseas-Yusof Ishak Institute.

She said if the issues that had arisen in Indonesia-China bilateral relations were left unattended, they may “jeopardise all the gains that have been made, including Indonesia’s hard-won and still fragile interracial harmony”.

There are dividends to be had if both Indonesia and China can better align their interests. Jokowi will need to show political dexterity at harnessing China’s capacity to help, while at the same time holding the line on anti-Chinese sentiments at home.

Indonesians stage an anti-China rally in front of the Chinese consulate in Surabaya on December 27, 2019. Photo: AFP

And for Beijing to move ties with Indonesia forward, it will need to understand how to navigate this relationship on new terms it has hitherto been unused to in its dealings in Asia, given that its current frameworks of reference range from big power rivalry to small states balancing all sides to client states.

Xi’s remarks during Monday’s call acknowledged Indonesia’s unique position in the region, when he said China attaches great importance to Indonesia’s status and role in international and regional affairs.

Indeed, Indonesia – in spite of what critics say about its lacklustre diplomatic leadership under Jokowi – as a sizeable country and a co-founder of Asean, aims to stake its rightful place in an evolving regional architecture.

Post