Partnering for the common good
China, Indonesia must continue to work together for economic progress, stability of region
The G20 Summit in Bali, Indonesia, in November concluded with a declaration covering many issues including how to boost global economic recovery and overcome global challenges, and minimize the impacts of the COVID-19 pandemic and the Russia-Ukraine conflict on the global economy.
Also, the declaration addressed other key issues such as tackling climate change, promoting digital innovation, safeguarding food and energy security, realizing the United Nations’ Sustainable Development Goals, and facilitating global economic cooperation.
A number of economic cooperation organizations have been established over the years in the AsiaPacific region, including the Association of Southeast Asian Nations, ASEAN-Plus and the Regional Comprehensive Economic Partnership, in order to boost economic development.
The RCEP has 15 member economies — the 10 ASEAN member states, China, Japan, the Republic of Korea, Australia and New Zealand.
According to World Bank data, the RCEP represents about 30 percent of the global population and accounts for 30 percent of the global GDP.
Within the RCEP, China is Indonesia’s largest trading partner, with their trade hitting $124 billion in 2021. The Indonesia-China strategic comprehensive partnership has been flourishing in not only trade but also investment, tourism and people-topeople exchanges.
However, diplomatic relations between Indonesia and China have experienced ups and downs in recent times. From the presidencies of B.J. Habibie and Abdurrahman Wahid to those of Megawati Sukarnoputri, Susilo Bambang Yudhoyono and Joko Widodo, Indonesia and China have taken their relations forward based on trade and economic ties despite the odds.
Indonesia and China have a number of bilateral and multilateral economic bridges such as ASEAN+China, the RCEP and the China-led Belt and Road Initiative. In fact, President Xi Jinping proposed the 21st Century Maritime Silk Road (which along with the Silk Road Economic Belt makes up the
BRI) while addressing the Indonesian parliament in Jakarta in October 2013.
Xi told the Indonesian parliamentarians that China will focus on building trust and developing good neighborliness through the initiative and that the country is committed to a relationship of sincerity and friendship with ASEAN member economies.
Throughout history, Southeast Asia has been an important market for China and vice-versa. President Widodo, Indonesia’s current leader, has highlighted the importance of the region, especially Indonesia’s geographical position, with his strategic initiative called “Global Maritime Fulcrum”, which complements the BRI and will help boost economic development in the region.
In 2018, Indonesia and China signed memoranda of understandings to promote infrastructure cooperation. Indonesia has established several business hubs. It is also developing North Sumatra as an economic hub, North Kalimantan as an energy and mineral hub, Bali as a high-tech and creative economy hub, and North Sulawesi as a Pacific Rim economic hub.
The bilateral cooperation framework covers the development of industrial parks, power plants, waste management, transportation, ports, special economic zones, 5G and fisheries. Also included in the framework are specific development projects such as the Karawang and Tangerang Industrial Park, Morowali Industrial Park and the Jakarta-Bandung high-speed railway.
Indonesia’s high-speed railway project is a milestone in Sino-Indonesian cooperation and a foundation for deeper cooperation under the frameworks of the BRI and the Global Maritime Fulcrum.
Yet, despite the success of the BRI and the Global Maritime Fulcrum projects, some Indonesian citizens fear that the Indonesian government’s over-dependence on China for its infrastructure development and investment could force Indonesia into a “debt trap”, and therefore are opposed to Sino-Indonesian development projects.
As such, the Indonesian government should clearly explain to the Indonesian people the importance and benefits of Sino-Indonesian development projects before finalizing the plans. This will help prevent misunderstandings and false accusations.
To maintain healthy and beneficial cooperation, Indonesia and China should also pay attention to intangible social issues, instead of only focusing on tangible benefits.
The synergized development framework is an avenue for economic success for both China and Indonesia. With a combined population of about 1.69 billion and GDP of about $16 trillion, China and Indonesia account for half of East Asia’s economy. And together, the two G20 members can make greater contributions to the global economic development.
In short, Indonesia and China must continue to work together to boost economic development, and maintain peace and stability in the region.