China-Indonesia cooperation deepens: the implications for Indonesia’s foreign policy

Updated On: May 04, 2011

Chinese Premier Wen Jiabao met with Indonesian President Susilo Bambang Yudhoyono on Friday 29 April 2011. Both leaders emphasized the importance of promoting mutually beneficial cooperation and bilateral ties.

Prior to this, the most recent high profile Chinese visit to Indonesia was in November 2010. That saw Beijing announcing they would invest US$ 6.6 billion into much needed infrastructure in Indonesia. Interestingly, onea day later in 2010, on November 9, US President Barack Obama also arrived in Jakarta.

Today, Indonesia stands asis one of China's most important trading partners in the region. Last year, their bilateral trade between the two stood at US$42.7 billion, 150% that of the year before.
Over the past weekend, China and Indonesia pledged to deepen economic cooperation in various fields to meet the newly-set trade target of US$80 billion U.S. dollars by 2015. Leaders pledged to increase cooperation in various areas like such as energy, disaster prevention and relief, education, and the promotion of cultural exchanges and people to people interaction were mentioned.

Report: Wen’s visit to Indonesia [CNC, April 30, 2011]
Report: Indonesia- China relations: Challenges and Opportunities [IDSA Issue Brief, 2010]

In contrast, the US-Indonesia bilateral talk when US president Barack Obama visited Jakarta in 2010 had focused mostly more on education and democracy building. 
In an analysis piece, Natalia Soebagjo, the chairperson of the Center for Chinese Studies at the University of Indonesia, compares Mr Wen’s visit to Indonesia with President Obama's visit and says that unlike Indonesia's complex relationship with the United States, trade dominates its ties to China.

"When the Americans come to Indonesia the focus is primarily on issues related to democratization, if you look at the USAID programs a lot of it is also related to democratization, also a little bit of economic empowerment. Whereas the Chinese when they come, it is just about money," said Soebagjo.

Background and analysis: Trade, Investment Dominates China's Premier's Visit to Indonesia [Voice of America, April 29, 2011]

The question now is whether it is possible for Indonesia to have good and stable relations with both the countries which are courting them.

On the one hand, Indonesia still leans towards Washington, viewed as a long time partner of Indonesia. But on the other hand, China’s willingness to share its economic success has allowed Jakarta to look past historical baggage, and get closer to China. Also, there seems to be a feeling in Indonesia that China would will stay away from Indonesia’s future domestic affairs in the future. 
Jakarta needs to be extremely cautious in maintaining relations with both countries. With all the help the US has rendered to them, Jakarta has to keep its association with the US intact, as well asAt the same time it must strengthen bonds with China, their its upcoming superpower neighbor, which is poised to help them in mutually beneficial relations in the future.

Background and analysis: Indonesia- China relations: Challenges and opportunities [IDSA Issue brief 2010]

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