October 27, 2022
JAKARTA – Indonesia’s determination to maintain close ties with China may bear fruit following the unprecedented third-term reelection of President Xi Jinping to China’s political and military leadership, buoyed by what analysts believe to be the promise of continuity ahead of a “bleak” year.
Xi’s China has become one of Indonesia’s largest trade and investment partners, earning it a “comprehensive strategic partnership” while also igniting fears Jakarta may willingly turn a blind eye on the unsavory aspects of the diplomatic relationship.
Xi was reelected as the general secretary of the Chinese Communist Party’s Central Committee for a third five-year term on Sunday, paving the way for him to secure a third term as China’s external-facing president. He was also reappointed head of China’s Central Military Commission.
President Joko “Jokowi” Widodo congratulated Xi for his reelection and expressed hopes that bilateral relations would continue on good terms and bring more investment into the country. He tweeted his praise, saying Indonesia looks forward to strengthening the partnership.
“Congratulations to President Xi Jinping on his reelection as General Secretary of the CPC [Communist Party of China]. Looking forward to working together in further strengthening the Indonesia-China partnership and promoting peace, stability and prosperity in the Indo-Pacific and beyond,” the President said on Monday.
The early commendation itself is an oddity, considering Xi has yet to officially reprise the presidency, and appears to signal close rapport among the leaders. With his third term in the pocket, Xi may yet impart some wisdom to Jokowi after several failed attempts to extend his own presidential tenure beyond the two-term limit.
Besides Jokowi, Investment Minister Bahlil Lahadalia also lauded Xi’s triumph, saying that the leaders maintain “good communications” with one another and that Xi’s reelection would only improve relations with Indonesia.
He expressed hope that bilateral relations would bring in more “win-win” investments.
“I believe that China’s investments in Indonesia will increase each day, in the context of [deals] that are mutually beneficial, mutually respectful and can help each other grow, especially to create jobs and add value,” he said at a press conference on investment realization on Monday that also warned against a “bleak” 2023 forecast.
Like many other countries faced with surging inflation and weaker growth forecasts next year, Indonesia could use all of the potential investments from China it can get during a highly political year ahead of the 2024 general elections.
Good all around
Jokowi and Xi are expected to meet next month for the Group of 20 Summit in Bali and the long-awaited trial of the Jakarta-Bandung high-speed railway (HSR). The latter project, which was awarded to China, had already seen delays and Jakarta had to bear extra costs as a result.
The upcoming meeting would be at least the sixth bilateral in eight years, following Jokowi’s visit to Beijing in July, in which they recommitted to synergizing China’s Belt and Road investment drive with Indonesia’s Global Maritime Fulcrum infrastructure strategy, among other things.
Meanwhile, analysts say that Xi’s reelection would bring continuity to the Indonesia-China bilateral relationship that had been proceeding on good terms under Jokowi and Xi.
The Centre for Strategic and International Studies’ (CSIS) China researcher, Veronika Saraswati, said that China’s thinking on how to build relations with its partners is well established at this point by way of the constitution and any past precedents, and is thus not reliant on the figurehead that currently leads the economic powerhouse.
Veronika said that if China and a partner like Indonesia have determined that they need each other, then China would continue to strengthen its ties regardless of its leadership.
“China is Indonesia’s largest trading partner; but for China, Indonesia is also important as a neighboring country and an important economic partner in ASEAN,” she said on Tuesday.
According to Investment Ministry data, China is second only to Singapore in terms of investment realization in the country, having funneled US$5.2 billion in the period between January-September this year. This figure makes up more than 15 percent of total realized investments.
Indonesia recorded a trade surplus of $2.92 billion with China last year and emerged as Beijing’s third-largest trade partner among ASEAN member states. Conversely, China is the top destination for Indonesian exports (21.83 percent market share) and the top source of Indonesian imports (34.74 percent market share).
Separately, Gadjah Mada University international relations researcher Riza Noer Arfani said that under the Jokowi administration, Indonesia’s relations with China have been at its warmest since Jakarta normalized ties with Beijing in the 1980s.
“China’s strategy in approaching Indonesia just happens to fit quite well with Jokowi’s mission statement that puts an emphasis on infrastructure,” Riza said on Tuesday.
He also noted that there have been no notable diplomatic incidents with China since then. Indonesia is pushing for the issuance of a code of conduct in the South China Sea through ASEAN, and has at times argued about fishing and labor laws with China.
Riza added that while there were hopes for more Chinese investments to Indonesia with Xi’s reelection, Indonesia also must pay attention to how China recovers from the economic impacts of COVID-19 and navigate the threat of global recession, in order to gauge how much investment into the country can be realized. (tjs)