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New dynamics emerge in Indonesia-China relations

Which country has Indonesia grown closest to in the last five years? My answer would be: China.

Indonesia's partnership with China is perhaps the most substantial compared to that with other countries.

Indonesia trades with China almost three times more than with the United States. China's investment in Indonesia has been the fastest growing compared to other major investors. The country’s investment in Indonesia in 2017 was 17 times more than its investment in 2007. Chinese tourists visiting Indonesia outnumber American, Australian, Japanese and Russian tourists combined. More Indonesian students are studying in China than in the US. Both sides have announced that Indonesia's Global Maritime Fulcrum (GMF) and China's Belt and Road Initiative (BRI) are compatible. Jakarta supports the BRI (with certain terms) and Beijing supports GMF without qualification. Indonesia-China relations involve ministerial mechanisms, sectoral dialogues and exchanges -- second perhaps only to Indonesia's partnership with Australia.

 President Joko “Jokowi” Widodo has met with President Xi Jinping eight times and has visited China four times. President Xi has visited Indonesia three times.

Yet Jokowi has not visited President Donald Trump at the White House and Trump has neither visited Indonesia since assuming office in 2016.

Indonesia's political establishment understands that China today is not China five decades ago. Many Indonesians believe China represents "the future" in that Indonesia's economic fortunes will be inevitably and increasingly tied to China. Yet, some Indonesians are also wary of the risk of becoming too politically and strategically close to China.

Significantly, while government-to-government and business-to-business relations between the two countries are generally strong, perception from segments of the grassroots remain problematic, with issues such as the influx of Chinese workers, China's fishing boats, Uighur Muslims and wild conspiracy theories. Officials are thus cautious regarding Indonesia’s China policy.

Still, in the past five years, Jakarta's relations with Beijing have warmed much more relative to relations with Washington, DC, which have somewhat cooled.

Jakarta-Beijing relations are being tested by what has happened in the North Natuna waters. The incursion of foreign ships into Indonesia's exclusive economic zone in the Natuna waters is nothing new. But this time the incursion was connected with "overlapping claims" of the “nine-dash line”, the huge public attention and a dangerous brinkmanship between Indonesia’s Navy and China’s coast guard.

Further, the Natuna issue, and hence relations with China, has touched a raw nerve in Indonesian nationalism. Many Indonesians were irked upon learning that China had claimed Indonesian waters in the North Natuna Sea, which implied that China was a country next door, something not taught in their school books.

Indonesians were also amazed that the Chinese ships refused to leave when asked to do so by Indonesian authorities and that it took a presidential visit to Natuna for the Chinese ships to exit from the North Natuna sea waters, but returned again to the area. This is in line with Beijing's strategic behavior in similar situations elsewhere, namely to consistently project that China is a big power and not one to be pushed over.

The skirmish seems to have de-escalated for now. So what’s next? To begin, expect Indonesia's economic cooperation with China to continue and intensify. This is due to the economic complementarity and imperative: President Jokowi has made it clear that Indonesia's economic growth depends much on trade and investment, and China presents itself as the biggest export market and source of a large pool of investment funds. Indonesia and China also have a trade target of US$100 billion in the near future — an ambitious target that Indonesia does not have with other countries. Thus, as one Indonesian official told me, Jakarta will "compartmentalize" the Natuna issue in the larger context of Indonesia-China relations.

Indonesia’s government feels the need to do some rebalancing. Jakarta -Beijing relations will remain close but many "what if" questions are being asked in government circles.

The Natuna issue has forced Jokowi's administration to also see China in geopolitical terms. Jokowi's offer to the Japanese to invest in Natuna is a case in point with regard to rebalancing but it is only the beginning. An important part of this rebalancing is the question of what will happen to Indonesia-US ties. Jokowi may find stronger reasons to visit the US this year or the next. Moreover, despite Washington’s distraction with impeachment and the upcoming elections, we can expect greater efforts to elevate US-Indonesia defense ties, and the full normalization of military-to-military relations.

While Indonesia-US economic relations are lagging far behind those of Indonesia-China, US-Indonesia military-to-military relations are far more substantive compared to similar relations with China. The US and Indonesia have about 220 military cooperation activities annually — far more than what China does with Indonesia. When I asked aspiring generals where I lectured who they prefer — the US or China? — the hands up were overwhelmingly for the US. Defense Minister Prabowo Subianto is also keen to shore up defense ties with the US. It seems clear Beijing wants to avoid acrimonious relations with Indonesia.

Beijing knows that engaging Southeast Asia and embracing ASEAN necessitates positive relations with Indonesia as Southeast Asia's biggest nation. This is why Beijing's response to the recent Natuna row has been much more restrained compared to its harsh response to the Philippines when the latter challenged China's position in the Kalayaan waters. Beijing sent around 100 ships to Kalayaan waters, boycotted its bananas and pineapples, etc. This also explains why media coverage of the recent Natuna issue in China has been much more subdued compared to the loud media and protests against Japan when Chinese boats were seized by Japan in 2012 in a disputed area in the East China Sea. Indonesians therefore don’t need to feel insecure about our legal position in the Natuna waters,which is based on the United Nations Convention on the Law of the Sea (UNCLOS) and is recognized by ASEAN neighbors.

China's ambition is not to engage in border negotiations but to enhance its strategic presence in the South China Sea. China is not likely to expel any ASEAN claimants’ presence in the Spratlys since that would harm relations with ASEAN. Besides, China's legal position on the nine-dash line is still undeveloped and China is finding it difficult to justify these claims in accordance with UNCLOS.

That is why China is investing in working out the ASEAN-China Code of Conduct on the South China Sea because diplomatically that is presently Beijing’s best option. Finally, more predictability is urgent in dealing with future standoffs. As one Indonesian official said, the North Natuna sea row shows that "there are no rules of engagement on both sides". Despite the government pronouncing "no bargaining" with Beijing, Chinese ships will keep returning to the North Natuna Sea because it is part of China's strategy elsewhere in the South China Sea: to continuously reinforce its presence within the nine-dash line.

Fortunately no shots were fired in the recent row but there must be an understanding to prevent one side from shooting the other the next time around. Diplomatic finesse and creativity on both sides is required.

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