RESEARCH

Indonesia-China Relations: Coming Full Circle?

November 12 , 2019 12:53 AM by Dewi Fortuna ANWAR

Bilateral relations between Indonesia and China have many complicating factors, and they will need to be handled carefully if they are to be sustainable. While recognizing the growing importance of China as a rising major power, particularly in the economic field, Indonesians have generally continued to express ambivalence towards China. In recent years, especially since President Jokowi's overt courting of Chinese investment in Indonesia's infrastructure projects, there has been mounting domestic criticism against China's business practices and Indonesia's increasing economic dependence on China. Although it has been shown to be widely exaggerated, the reported influx of large numbers of Chinese nationals entering Indonesia to work either legally or illegally have raised real concerns among Indonesians. 

Foreign investments are usually expected to yield multiplier effects, including in the forms of technology transfer, know-how and employment for the local communities where development projects are being carried out. By bringing in most of the workers from China, not just the top personnel and experts, as is the usual practice among American, European or Japanese companies, Chinese investments in Indonesia's massive infrastructural projects have, therefore, come under fire for their lack of multiplier benefits, especially for denying greater work opportunities to local low-skilled workers. The Jokowi government has also been criticized for accepting Chinese foreign investments and loans for infrastructural projects under these terms, since they are not in line with Indonesia's quite restrictive employment law, which only allows expatriates with special skills that Indonesia still lacks to work in the country. 

To prevent more damaging pushbacks against China's involvement in Indonesia's development projects, which may also trigger anti-Chinese sentiments, both the Chinese and Indonesian governments will need to change the ways that projects are carried out, to ensure that they provide multiplier benefits to the local communities. While it is in Indonesia's interest to remain open to Chinese investment and other opportunities that an advanced China has to offer, it is also critical that Jakarta continues to diversify its sources of investment and loans and avoid becoming too dependent on any one country. 


Note: 

Anwar, Dewi Fortuna. "INDONESIA-CHINA RELATIONS: Coming Full Circle?" Southeast Asian Affairs, ISEAS - Yusof Ishak Institute, 2019, pp. 145–62, https://www.jstor.org/stable/26939692.