For almost three decades since the normalization of bilateral ties in 1989, China and Indonesia have enjoyed among the most stable and promising bilateral relations of anywhere in the world. As the world’s largest Muslim-majority nation, third largest democracy, and a proud member of the G20 group of leading powers, Indonesia represents a crucial strategic partner for a rising China.
This is most especially true in Southeast Asia, where Indonesia has been long regarded as a de facto leader, not only due to its sheer size and influence, but also its institutionalized commitment to the Association of Southeast Asian Nations (ASEAN). Indonesia also stands as one of the sinews of the Non-Aligned Movement (NAM) and Global South solidarity, with the late Indonesian strongman Sukarno among its founding fathers.
Not even anti-China pogroms, nor Indonesia’s democratization and subsequent tilt towards the West, in recent decades have dented the momentum of rapidly blossoming bilateral relations. Yet, China’s expanding maritime reach and ambitions, as well as Indonesia’s growing self-confidence and sense of itself as a ‘global maritime fulcrum’, has placed the two powers on a collision course.
Deepening maritime tensions off the coast of Indonesia’s Natuna islands, combined with rising anti-China sentiment at home, has placed a structural limit on the trajectory of warming bilateral ties. In the words of prominent Indonesian diplomat Dino Djalal, there is “a feeling among officials that they cannot go much farther than public opinion and need to be cautious regarding its China policy.”
Follow the Money
It’s hard to understate how fast and how far Indonesia-China relations have come within a single generation. Throughout the mid-20th century, the two countries were at loggerheads amid Jakarta’s bloody crackdown on communist elements at home and undeclared alignment with the capitalist West against the Soviet-Chinese bloc.
In fact, Indonesia was among the last countries to have normalized relations with post-Mao China, as Deng Xiaoping deftly reconfigured strategic relations with Beijing’s near neighbors. The end of Cold War saw a dramatic turn in bilateral ties, as China rapidly became an indispensable developmental partner for post-reformasi Indonesia.
The numbers are staggering. Between 2007 and 2017, Chinese investments in Indonesia increased by 1,700 percent. Indonesia’s bilateral trade with China is three times larger than that with the United States. The number of Chinese tourists in Indonesia, meanwhile, is larger than that of tourists from North America, Japan, Australia, and Russia combined.
This seemingly ineluctable entwinement has further accelerated under the populist president Joko Widodo, better known as Jokowi, who has visited China four times and met Chinese President Xi Jinping for a record eight times. Meanwhile, he has yet to make a single official visit to the White House under President Donald Trump, who has also shunned the Southeast Asian powerhouse. In contrast, Xi has visited Indonesia three times already, underscoring the significance of Jakarta in Beijing’s strategic calculus.
As former Indonesian Ambassador Dino Djalal explains, “Many Indonesians believe China represents ‘the future’ in that Indonesia's economic fortunes will be inevitably and increasingly tied to China.” Jokowi’s blatant prioritization of China, which is central to his aggressive infrastructure development program, has often invited criticism at home, with rivals publicly accusing him of either being of Chinese ethnicity or getting too close to Beijing.
Back to Reality
With that being said, just as the two nations became closer, structural frictions began to manifest. The first sign of trouble emerged when Indonesia adopted the aggressive “Sink the Vessels” policy in order to stem illegal fishing by foreign vessels, most prominently China.
Moreover, Jakarta has been perturbed by the overlap between the southernmost tip of the ‘nine-dashed-line’ claim and the waters off the coast of the Natuna islands, which lie around 1,100km (684 miles) south of the Chinese-claimed Spratly Islands. China has claimed ‘traditional rights’, including fishing, in the area.
In response, Indonesia also stepped up its pressure on China to clarify the precise legal basis and parameters of its ‘nine-dashed-line’ claims in the South China Sea. In a sign of growing Indonesian assertiveness as well as concern over China’s expanding presence within its Exclusive Economic Zone (EEZ), Jakarta renamed the waters off the coast of the Natuna islands as “North Natuna Sea” in a direct challenge to Chinese claims in the area.
Indonesia has also taken an increasingly tough multilateral position. Instead of siding with China, Indonesia called for respect of international law, particularly the United Nations Convention on the Law of the Sea (UNCLOS), after Beijing rejected the 2016 arbitral tribunal ruling at The Hague regarding the South China Sea disputes. Shortly after, Jokowi ruffled some feathers in Beijing when he proposed joint patrols by ASEAN states across the disputed waters, which China considers as its ‘blue national soil’, during the inaugural Australia-ASEAN Summit in Sydney.
Things came to head in January, when the Indonesian Foreign Ministry accused China of “violation of [its] sovereignty” amid the reported incursion of dozens of Chinese vessels within its EEZ in the Natuna Islands. In uncharacteristically strident language, Jakarta also challenged Beijing’s claims, arguing, "China's claims [within the Natuna Islands’] exclusive economic zone on the grounds that its fishermen have long been active there...have no legal basis and have never been recognized by the UNCLOS 1982."
The gravity of the situation became crystal clear when Jokowi, following the deployment of warships and fighter jets to the contested area, personally visited Natuna Islands, where he warned China: "We have a district here, a regent, and a governor here…There are no more debates. De facto, de jure, Natuna is Indonesia." Despite subsequent efforts by Indonesian officials, including Chief Minister Luhut Pandjaitan and Defense Minister Prabowo Subianto, to de-escalate tensions, the incident underscores how the future of Indonesia-China relations will also depend on deft diplomacy and proactive conflict management beyond strategic inertia alone. No less than one of the most promising bilateral relations in Asia is at stake.
