China-Indonesia relations move forward, need care from both sides

By Ge Hongliang Source:Global Times Published: 2018/5/7 20:43:39

Illustration: Liu Rui/GT

Chinese Premier Li Keqiang started an official visit to Indonesia at the invitation of Indonesian President Joko Widodo on Sunday. This was the first foreign visit by Li since the new Chinese leadership was elected in March.

Upon the fifth anniversary of the comprehensive strategic partnership between China and Indonesia, the visit bears enormous significance for the continuation of leadership exchanges and the progress of the two countries' partnership. Meanwhile the visit will help cope with the potential problems that the two countries face during their cooperation.

With the aim of realizing the 21st century maritime Silk Road and the community of common destiny, the China-Indonesia comprehensive strategic partnership has achieved remarkable progress in the past five years and established the three pillars of the bilateral relationship: political security, economic cooperation and people-to-people exchanges.

Political security, mutual political trust and defense cooperation between the two countries have been enhanced. In the past five years, top leaders of China and Indonesia have frequently visited each other. Based on these visits, the two countries have established high-level dialogue mechanisms in sectors including the economy, personnel exchanges and defense security. These are the important driving forces for the expansion of bilateral trade and personnel exchanges, more pragmatic cooperation on counter-terrorism and defense and the strengthening of mutual political trust.

Trade between China and Indonesia has been increasing and heading toward a state of balance. On the one hand, China is Indonesia's largest export and import market as well as main source of foreign investment. On the other, the trade deficit between the two has been narrowing. It was reported that the figure decreased 42 percent in 2017.

Personnel exchanges have attracted particular attention from the leaderships of the two countries in the past five years. Top leaders have reached consensus that the two countries should expand and deepen personnel exchanges. In 2013, Chinese President Xi Jinping and then Indonesian president Susilo Bambang Yudhoyono agreed that both sides would send 100 young people to visit each country every year and China would also provide 1,000 scholarships for young Indonesian people to study in China.

Nonetheless the development of a China-Indonesia comprehensive strategic partnership faces thorny issues, some of which are exemplary in China's cooperation with other Southeast Asian countries.

First, the imbalance in trade and investment is still a prominent issue that disturbs China's bilateral relations with Indonesia and other Southeast Asian countries. In 2017, Indonesia had a $6.22 billion trade deficit with China. With investment, although a latecomer, China has developed very fast with Chinese companies focused on mining, manufacturing, basic infrastructure and e-commerce.

Second, Chinese corporations which invest and build factories in Indonesia face difficult issues such as land expropriation and lack of work visas.

Cultural discrepancies are also a hard issue to crack, especially those regarding religious beliefs and relevant rituals.

In addition, the political situation in Indonesia and party wrangling have a deep influence on the steady development of cooperation between China and Indonesia, for instance, the fluctuation and lack of continuity of policies and the politicization of Chinese investment. The approaching 2019 general election has highlighted this problem.

Therefore, the development of bilateral relations needs care from both sides. Despite the strategic commonalities of the Belt and Road initiative proposed by China and Indonesia's Global Maritime Fulcrum strategy, the two countries still need to carry out more pragmatic and concrete measures to solve their problems in cooperation.

For instance, the two can hold international import expositions to boost China's imports from Indonesia. Chinese companies can cultivate more local talent and transfer their technologies to motivate Indonesia's demographic dividend and prevent the labor issue from being politicized. An emergency consultation mechanism can be established to cope with the challenges posed by policy changes and political instability.

The author is a research fellow at the Charhar Institute and the college of ASEAN studies at Guangxi University for Nationalities.


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