China's Economic Engagement with Southeast Asia: Indonesia

This Trends in Southeast Asia series — now revamped and redesigned — acts as a platform for serious analyses written by selected authors who are experts in their fields. It is aimed at inspiring policymakers and encouraging scholars to contemplate the diversity and dynamism of this exciting region.

There is little evidence that Beijing is attempting to use economics to seduce or else compel Jakarta to make strategic decisions that the latter would not otherwise make. Even if China attempted to do so, the structure of the Indonesian economy and trend of its economic development model and open approach suggests that Beijing would have little capacity to significantly influence Jakartas strategic decisions. An entrenched mindset of maximising strategic independence and autonomy means that Indonesia will continue to avoid overtly picking sides and avoid strategic entanglements even as it seeks outside assistance to accelerate economic development. This will likely mean that Jakarta will continue with a posture of offering friendly ambivalence vis-a-vis China as a defensive and small-target hedging strategy.