CHINA’S RISING INFLUENCE IN INDONESIA

• The past 100 years have been a period of growth for China at the behest of the Communist Party of China (CPC) and its leaders such as President Xi Jinping who have understood global trends and shaped China’s diplomatic tactics and global strategy. China’s diplomacy for development emerged with the wave of globalisation after the Cold War and China's foreign policy saw a shift from the “economy for diplomacy” to “diplomacy for economy”. The CPC has always been a step ahead with comprehensive involvement in diplomacy that has continued to impact the course of international relations.
  
  
• China has been establishing its presence in the developing nations of Southeast Asia by launching the Maritime Silk Road initiative for the island countries such as Maldives and Indonesia. Although Indonesia and China have had a tumultuous relationship in the past, China has clearly flipped the script in its favour. Indonesia with its strategic location along the South China Sea and its 17,000 islands spread across the vital sea lane has been the centre of a geopolitical battle between China and the US. In 2014, China created a $20 billion Maritime Silk Road fund in Indonesia. Even before this, Chinese officials have been focusing on bringing out mutual cooperation through Shanghai Cooperation Organisation (SCO) and the ASEAN Plus Three. In 2010, China provided $1 billion in concessionary loans and $8 billion in development financing to Indonesia. Combining their respective growth plans has resulted in high-quality Indonesian goods reaching Chinese consumers, Indonesian students enrolling in Chinese colleges and universities, and expanded economic opportunities for Chinese companies. Overall, integrating their distinct growth strategies has improved China's development environment and offered numerous development opportunities to Indonesia.

• President Joko Widodo has always been concerned about inter-island connectivity and enhancing the infrastructure of the country and thus the concept of Indonesia’s Global Maritime Fulcrum (GMF) came into existence in 2014. The foreign policy of Indonesia was changed and Indonesia’s Ocean Policy was designed with six principles and 76 strategic programs. In November 2022, Chinese State Councilor and Defense Minister General Wei Fenghe discussed their bilateral maritime relations with Indonesian Defense Minister Prabowo Subianto. Given the serious and complicated challenges that the Asia-Pacific region is currently facing, during this meeting, China and Indonesia discussed how both countries should play a more significant part in preserving regional security and stability. To do this, the countries decided to maintain close strategic communication, making effective use of the mechanism for cooperation, deepening pragmatic cooperation, and strengthening multilateral coordination, all while maintaining a healthy development momentum in their bilateral relations.

• China has been having maritime disputes in the South China Sea for a long time now and the country has been making efforts to ensure mutual trust and security cooperation among the small developing countries of Southeast Asia. It has been a part of the naval exercises organised by Indonesia since 2014. In this year’s joint naval exercises hosted by Indonesia from June 4 to 8 in Makassar, both China and the US showed up with their warships and naval vessels. Indonesia is a critical part for China’s energy security and thus even with the current conflicts, Indonesia is seen tilting towards China due to the continued efforts by China in developing bilateral trade and maritime infrastructure cooperation.

Blending Infrastructure and Trade

• In 2018, China and Indonesia joined hands with a Memorandum of Understanding (MoU) linking Indonesia’s GMF and China’s BRI for “strategic alignment.” In 2021, Indonesia rose to be the world’s third-most BRI infrastructure project after Cambodia and Pakistan. Luhut Binsar Pandjaitan, Indonesian minister of maritime and investment affairs said in an interview that the reason China is favoured over the US is because of the lack of conditions that the US seems to come often with before an investment. According to sources, in the first nine months of 2022, China reportedly invested more than $5 billion in Indonesia compared to nearly $2 billion from the US. Both nations have suggested various investment fund projects or banks for infrastructure development since they view sound infrastructure as a crucial pillar of global economic progress. The two nations promote infrastructure investment as a primary priority on the G20 agenda. Additionally, Indonesia occupies a significant place in the global financial organisation and actively helped to build the Asian Infrastructure Investment Bank as one of its founding members. Thus, China and Indonesia are important players in the regional economic governance of ASEAN and across the Indo-Pacific region. 
  
  

• China has been focusing on various infrastructure projects in many locations in Indonesia such as North Sumatra, North Sulawesi, Bali and North Kalimantan. Many industrial parks, metallurgical and power plants and tourist facilities have been established in these regions. The Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi is one of the largest Chinese investments in Indonesia and is remarked as a perfect model of Sino-Indonesian collaboration. The park began construction in 2013 and is a joint venture between China’s Tsingshan Group and Indonesia’s Bintang Delapan Group. At present, the industrial park employs nearly 70,000 Indonesian workers. In January 2021, the two countries signed an MoU on “Two Countries, Twin Parks” to advance their mutually beneficial ties and pledge their commitments to developing interconnected business sectors in industrial parks. Since the beginning of 2023, Chinese local officials launched multiple business visits to Indonesia and facilitated 19 bilateral cooperation projects backed with 42.1 billion yuan of investment. Long before the development of infrastructure cooperation between the two countries, China has been establishing influence in Indonesian society using ‘soft power tactics’.

Playing the Cultural Advantage

• With the help of Indonesia’s Coordinating Board for Mandarin Language Education, there have been six Confucius Institutes established across Indonesia to promote the Chinese language and various aspects of culture through exchanges and activities. In 2011, Hasanuddin University in South Sulawesi partnered with Nanchang University in China’s Jiangxi province to carry out student exchange programs. According to the reports, 2,000 Indonesian students have been sent to China between 2011 to 2015. Confucius Institutes have also been founded at other universities such as Maranatha Christian University in Bandung, Tanjungpura University in West Kalimantan, and Muhammadiyah Malang University in East Java. Al Azhar Indonesia University in Jakarta founded a centre dedicated to Mandarin language and Chinese culture in 2005. Petra Christian University (UKP) in Surabaya, East Java, established its Center for Chinese Indonesian Studies (CCIS) in 2011. Moreover, Confucius Institutes have become the ‘primary tool’ to exert soft power in the country and minimise the anti-China sentiments among the people.
  
  

• Since 2013, there have been significant cultural exchanges between the two countries. China has been able to exemplify its soft power ties in Indonesia because of BRI in recent years. For the last decade, there have been many events organised to exhibit Chinese culture such as the 2017 China-Indonesia Cultural Festival in Malang, East Java. These cultural activities are the focal point of China's soft power strategy as they aim to re-introduce China and its rich culture to Indonesian society. The “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road,” is the main strategy document of BRI and highlights “cultural exchanges' as a vital part of the initiative.

• China has also been actively trying to attract Indonesian students to study in China through various scholarship opportunities. These scholarships have taken many forms, although most students receive the Chinese Government Scholarship (CGS). The two countries started off their education partnership in 2015 with the agreement on scholarships and in 2016 with the agreement on high education qualifications. In 2017, another education partnership agreement was signed. An example of the education partnership established between the two countries is The China Education Exhibition that is held under the joint coordination of the Chinese Service Centre Exchange (CSCSE) and Indonesia’s Ministry of Education and Culture. According to the reports, in 2017, there were nearly 13,700 Indonesians studying in Chinese universities and the numbers have increased around 10 percent every year. The two countries have also initiated several joint laboratories, including a Biotechnology and High-Temperature Gas-cooled Reactor, the Indonesia China Transfer Technology Centre, and Scientific Exchange Programs.
  
  

• There has also been a rise in Chinese tourists to Indonesia since the Indonesian government’s policy of granting visa-free visits to Chinese citizens. The Memorandum of Understanding (MoU) was signed with China on tourism investment development to attract 10 million tourists from China per year. In 2020, the number of Chinese tourists to Indonesia rose by 17.58 per cent. With such efforts, China has successfully become the top trading partner of Indonesia as well as its second-biggest investor. Through their strategic partnership, China and Indonesia could contribute more to stabilising regional and global economic development and seek cooperation in global economic governance.
  
  

  Concluding India’s Stance

• India's strategic outreach towards Southeast Asian countries began in 1991 with the Look East Policy and expanded with the Act East Policy in 2014. India has been focusing on engaging with ASEAN countries to prevent the spread of China’s dominance in the region, China’s aggressive stance regarding the South China Sea issue has given an edge to India to develop its Indo-Pacific strategy but India’s soft power strategy lacks when compared to China’s comprehensive approach. Nonetheless, India has been making successful attempts to strengthen its ties with Indonesia.
  
  

• In 2018, the defence strategic partnership between the two countries progressed with the launch of a new naval exercise, Samudra Shakti, to incorporate a war-fighting component. The Indian Navy also supported Indonesia with disaster relief operations during the Sulawesi earthquake and tsunami in Palu in 2018. As for the economic partnership, India and Indonesia have been thinking of expanding trade and tourism between Indonesia’s Aceh province and India’s Andaman and Nicobar Islands which are separated by over 500 miles of sea. There have also been talks of the construction of a port at Sabang in Aceh, which has been highlighted as India’s rival to China’s BRI. 
  
  

• Indonesia is a significant actor in the Indo-Pacific region as well as the global stage as the largest economy in the Association of Southeast Asian Nations and a G20 member. Key forces advancing the development of global economic governance and collaboration among growing nations are China and Indonesia, two powerful developing nations. By establishing a Comprehensive Strategic Partnership with Indonesia in 2013, China demonstrated the importance the Southeast Asian nations hold in China's diplomatic agenda and its pivotal role in advancing Belt and Road cooperation. The positive impact of China’s diplomatic agenda in Indonesia can be seen through Indonesia experiencing political stability, brisk economic growth, social peace and stability, and development potential over the past few years. The long-term and fundamental goals of both China and Indonesia are served by closer collaboration. India's second-largest trading partner in the ASEAN region is Indonesia and to continue a mutually beneficial relationship, India needs to be cautious of China’s growing influence in the country.