New Dynamics Emerge in Indonesia-China Relations

By: Dr. Dino Patti Djalal *

JAKARTA, KalderaNews.com – If you asked me which country Indonesia had grown closest to in the last five years, my answer would be: China.

Indonesia has developed many “partnerships” with other countries — more than a dozen of them. Yet, no matter how you label them (“strategic,” “special, comprehensive,” ”21st century,” etc.), Indonesia’s partnership with China is perhaps the most substantial.

Indonesia trades with China almost three times more than with the United States. China’s investment in Indonesia has been the fastest growing compared to other major investors. The country’s investment in Indonesia in 2017 was 17 times more than its investment in 2007. Chinese tourists visiting Indonesia today outnumber American, Australian, Japanese, and Russian tourists combined. There are more Indonesian students studying in China than in the US. Both sides have announced that Indonesia’s Global Maritime Fulcrum (GMF) and China’s. Belt and Road Initiative (BRI) are compatible. Jakarta supports the BRI (with certain terms) and Beijing supports GMF without qualification. Indonesia-China relations are also saturated with a multitude of ministerial mechanisms, sectoral dialogues, and exchanges — second perhaps only to Indonesia’s partnership with Australia.

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It is also instructive that President Joko “Jokowi” Widodo has met with President Xi Jinping eight times and has visited China four times, including to attend the Belt and Road Summit. President Xi has visited Indonesia three times.

On the other hand, Jokowi has not visited President Donald Trump at the White House and conversely, Trump has not visited Indonesia since assuming office in 2016.

Indonesia’s political establishment understands that China today is not China five decades ago. Many Indonesians believe China represents “the future” in that Indonesia’s economic fortunes will be inevitably and increasingly tied to China.

Yet, some Indonesians are also wary of the risk of becoming too politically and strategically close to China. There is a paradoxical tendency to be close but to also maintain some distance.

Significantly, while government-to-government and business-to-business relations between the two countries are generally strong, the reality is that perception from segments of the grass roots of China remain problematic, with issues such as the influx of Chinese workers, China’s fishing boats, Uighur Muslims, and persistent wild conspiracy theories.

There is therefore a feeling among officials that they cannot go much farther than public opinion and need to be cautious regarding its China policy.

Still, despite all this, there is much evidence that in the past five years, Jakarta’s relations with Beijing have warmed much more relative to relations with Washington DC, which have somewhat cooled.

Jakarta-Beijing relations are being tested by what has happened in the North Natuna waters.

The incursion of foreign ships into Indonesia’s exclusive economic zone in the Natuna waters is actually nothing new.

What is new this time with the Chinese fishing ships is the fact that it was connected with “overlapping claims” of the “nine-dash line,” the huge public attention and a dangerous brinkmanship between Indonesia’s Navy and China’s coast guard.

What is also different is that the Natuna issue, and hence relations with China, has touched a raw nerve in Indonesian nationalism. Many Indonesians were irked upon learning that China had claimed Indonesian waters in the North Natuna Sea, which implied that China was a country next door, something not taught in their school books.

Indonesians were also amazed that the Chinese ships refused to leave when asked to do so by Indonesian authorities and that it took a presidential visit to Natuna for the Chinese ships to exit from the North Natuna sea waters, but returned again to the area. This is in line with Beijing’s strategic behavior in similar situations elsewhere, namely to consistently project that China is a big power and not one to be pushed over.

The Natuna skirmish seems to have de-escalated for the time being. So what can we expect next?

To begin, expect Indonesia’s economic cooperation with China to not just continue but to intensify.

This is due to the economic complementarity and imperative: President Jokowi has made it clear that Indonesia’s economic growth depends much on trade and investment, and China presents itself as the biggest export market and source of a large pool of investment funds.

Indonesia and China also have a trade target of US$100 billion in the near future — an ambitious target that Indonesia does not have with other countries.

Thus, as one Indonesian official told me, Jakarta will “compartmentalize” the Natuna issue in the larger context of Indonesia-China relations.

On the strategic side, the Indonesian government feels the need to do some rebalancing. Jakarta -Beijing relations will remain close but there are a lot of “what if” questions being asked now in government circles.

The Natuna issue has forced the Jokowi administration to also see China in geopolitical terms, not just for economic deals. President Jokowi’s offer to the Japanese to invest in Natuna is a case in point with regard to rebalancing but it is only the beginning.

An important part of this rebalancing is the question of what will happen to Indonesia-US relations. President Jokowi may just find stronger reason to visit the US this year or the next.

Moreover, despite Washington’s distraction with impeachment and the upcoming elections, we can expect greater efforts to elevate US-Indonesia defense ties, and the full normalization of military-to-military relations.

While Indonesia-US economic relations are lagging far behind those of Indonesia-China, US-Indonesia military-to-military relations are actually far more substantive compared to similar relations with China.

There are about 220 military cooperation activities between the US and Indonesia annually — far more than what China does with Indonesia.

Although it does not say so, the Indonesian Military (TNI) somehow tends to favor the US over China. When I asked aspiring generals where I lectured who they prefer — the US or China? – the hands up were overwhelmingly for the US. Defense Minister Prabowo Subianto is also keen to shore up defense ties with the US.

As for China, it seems clear Beijing wants to avoid acrimonious relations with Indonesia. Beijing knows that engaging Southeast Asia and embracing ASEAN necessitates positive relations with Indonesia as Southeast Asia’s biggest nation.

This is why Beijing’s response to the recent Natuna row has been much more restrained compared to its harsh and punitive response to the Philippines when the latter challenged China’s position in the Kalayaan waters. Beijing responded by sending around 100 ships, including naval vessels, to Kalayaan waters for a sustained period, boycotted its bananas and pineapples, etc.

This also explains why media coverage of the recent Natuna issue in China has been much more subdued compared to the loud media and aggressive protests against Japan when Chinese boats were seized by Japan in 2012 in a disputed area in the East China Sea.

The bottom line is that Indonesians do not need to feel insecure about our legal position in the Natuna waters, which is totally based on the United Nations Convention on the Law of the Sea (UNCLOS) and is recognized by ASEAN neighbors. No amount of foreign ship incursions can change Indonesia’s legal status over these waters.

China’s ambition in the near and medium term is not to engage in border negotiations but to enhance its strategic presence in the South China Sea. China is not likely to forcefully expel any ASEAN claimants’ presence in the Spratlys (as China did against Vietnam in the Paracels in 1974) since that would harm relations with ASEAN as a whole.

Besides, China’s legal position on the nine-dash line is still undeveloped and China is finding it difficult to justify these claims in accordance with UNCLOS. That is why China is investing in working out the ASEAN-China Code of Conduct on the South China Sea because diplomatically that is the best option for Beijing at the moment.

Finally, there is definitely a need for more predictability in dealing with future standoffs. As one Indonesian official told me, the North Natuna sea row has revealed that presently “there are no rules of engagement on both sides.”

Despite the Indonesian government’s pronouncement that there will be “negotiating” and “no bargaining” with Beijing, one thing is for certain: Chinese ships will keep coming back to the North Natuna Sea because it is part of China’s strategy elsewhere in the South China Sea to continuously reinforce its presence within the nine-dash line.

We were fortunate that no shots were fired in the recent row but there must be an understanding to prevent one side from shooting the other the next time around.

This will require diplomatic finesse and creativity on both sides.

* Dr. Dino Patti Djalal, Founder of FPCI and China Policy Group