Indonesia : In late 2019 and early 2020, China and Indonesia were inching toward armed conflict. China’s coast guard and fishing militia were making continued incursions into Indonesia’s exclusive economic zone in the Natuna Sea, a region of the Pacific Ocean located between Borneo and Sumatra and considered a traditional Chinese fishing region by Beijing. The intrusions into Indonesian waters prompted Jakarta to dispatch warships and F-16 fighter jets, and to call for Indonesian fishing vessels to relocate to the area. In the end, China decided to pull back, though occasional incursions still occur.
Since that potentially explosive confrontation, Chinese-Indonesian relations have quietly and steadily healed. This could have profound geostrategic significance for the United States and its competition with China in the Indo-Pacific. Washington views Indonesia—the world’s fourth-most-populous nation, whose more than 17,000 islands straddle the Pacific and Indian Oceans—as an increasingly important economic and security partner willing to stand up to Beijing. China likewise seeks to enhance engagement with Indonesia to have a friend in regional disputes, secure access to Indonesian resources, and perhaps leverage Indonesia as a strategic bulwark against Australia. For its part, Indonesia, like most other Southeast Asian nations, has traditionally followed a policy of nonalignment to avoid angering either the United States or China while simultaneously accruing benefits from both. From the U.S. vantage point, improving China-Indonesia relations—even if they don’t fundamentally depart from nonalignment—would be very much unwelcome.
China’s pandemic diplomacy certainly helped defrost relations. As COVID-19 began to ravage the globe in early 2020, Indonesia turned to China, which became its main supplier of much-needed personal protective equipment. Jakarta was grateful. Once vaccines became available in late 2020, China provided Indonesia with millions of Sinovac doses. As of May, 90 percent of Indonesia’s 75.9 million vaccine doses received have been Sinovac vaccines. Indonesian President Joko “Jokowi” Widodo prominently received his Sinovac jab on live television—with the broadcast clearly showing the box labeled “Sinovac,” an important public show of trust for Chinese-made vaccines. China further plans to help Indonesia become a regional hub for Sinovac production and exports.
Meanwhile, Indonesia has continued to benefit significantly from economic relations with China, where Beijing remains Jakarta’s No. 1 trading partner. While Indonesian exports to China—including commodities such as petroleum, iron ore, and palm oil—rose from 2019 to 2020, Indonesian demand for Chinese products dropped due to the pandemic. The resulting decline in the trade deficit has put bilateral trade on a healthier footing. Both countries’ participation in the Regional Comprehensive Economic Partnership is likely to accelerate trade further.