Indonesia’s Complicated Relations with China

The open confrontation between Indonesia and China in Indonesia’s fish-rich Natuna area and subsequent coolness between the two countries belies President Joko Widodo’s moves to establish closer ties with Beijing during the first months of his presidency, which began in October of 2014.

The president’s first international visit was to Beijing, followed with his full pledge to join the China-led Asian Infrastructure Investment Bank (AIIB), causing some nationalists at home to point to Indonesia’s “independent and active” foreign policy manifesto, telling Jokowi that although Indonesia needs investment from China, the second largest economy in the world, he should keep his distance.

Jokowi’s political opponents have raised the issue of incoming thousands of Chinese workers reported to be illegally working in Indonesia after the president signed many investment agreement with China. Antipathy to those workers has made headlines in influential Jakarta media for months.

The public was also shocked by Jokowi’s sudden decision to adopt Chinese technology instead of the long-planned Japanese equipment for Indonesia’s first high-speed railway line connecting the capital city Jakarta and Bandung in west Java.

The line is planned to span 42 kilometers from Jakarta to Bandung and is expected to be completed by 2019, at the time when Jokowi is expected to be seeking re-election.

The Ministry of Transport said the holding company PT Kereta Cepat Indonesia China (KCIC), had moved so fast that it hadn’t even obtained a business license for public railway infrastructure, urging them to work fast on the papers to get the project going.

Former transportation Minister Ignasisus Jonan refused to grant instant permits to the project, saying that his ministry is taking extra precautions since the Chinese loan has a tenure of 50 years and the government wants all assets to be in good condition when they are eventually handed over to the government. Johan was one of several ministers that Jokowi replaced during the July 27 cabinet reshuffle.

But Jokowi’s patience with China apparently has run thin at sea, with several Chinese-flagged vessels captured illegally while fishing in Indonesian waters, with the government saying the waters are part of their “traditional fishing ground.”

Open hostility on the Natuna waters continues to escalate, with the Chinese government warning Indonesia not to complicate the situation following a third confrontation between the two countries in 2016 alone.

The latest incidents involved the MV Kwang Fey 10078 and Han Tan Cou 19038 vessels, which were reported to have been fishing illegally in Natuna waters near the Riau Islands. A Chinese Coast Guard vessel forcibly rescued MV Kwang Fey 10078 by pushing it back into Chinese waters, taking it away from a patrol boat from the Indonesian Maritime and Fisheries Monitoring Task Force that was escorting the boat after apprehending it.

After the latest incident and several diplomatic notes sent to Beijing, Foreign Minister Retno Marsudi said Indonesia wants to maintain good relations with China but will not negotiate over violations of Indonesia's sovereignty and jurisdiction on the Exclusive Economic Zone (EEZ) and the continental shelf.

“We have a good relationship with China. We will strive to maintain our good relations along with international laws," Mafrsudi told journalists at the State Palace.

Jokowi then took several of his ministers for a “quick cabinet meeting” on board of Indonesia’s warship to send signals to Beijing that Indonesia is serious in defending its sovereignty.

These incidents add tensions between China and its neighbors the Asean member countries, as China has sought to assert its control in the region with its self-claimed nine-dashed line which take Chinese ownership almost to the doorsteps of several of the littoral countries. China claims most of the South China Sea, which includes overlapping claims by Vietnam, Taiwan, the Philippines, Malaysia and Brunei.

Will Indonesia add to these tensions, and how should Indonesia react to the perceived “muscle flexing” by Beijing?

“I think Indonesia is only attempting to maintain its strategic positions vis-a-vis China,” said Yeremia Lalisang, a scholar from the University of Indonesia, in an interview. “On the one hand, Indonesia has to reflect its commitment to international law, so there is no reason for the Indonesian government not to push China to respect it. However, it cannot be ignored that China is now the world's second largest economy, and it’s also clear that Jokowi's presidency has mainly focused on the efforts to revive Indonesia's national economic development. So, it seems Jakarta clearly understands that cooperative relations with China could contribute positively to the attainment of such a goal.”

The public and policymakers “should not only take the partial understanding of China’s muscle flexing, because then we will lose the opportunity for cooperation’s in other fields,” he added.

Today, Indonesia’s US$44 billion annual trade with China remains strong and first quarter investments from Beijing experienced a 400 percent increase from last year. However, China’s 14 percent realization rate on its investment pledges is much smaller than Japan and South Korea’s 70 percent realization rate.

What it all means is that Indonesia’s relations with China are complicated, and will remain so. Indonesia is struggling under Jokowi to assert itself as a maritime nation and has done so by spectacularly blowing up the fishing boats of the neighbors that stray into its waters as China has learned to its irritation. At the same time Indonesia needs China for as a trade partner and a source of investment. Those issues are not going to go away.