China Makes Headway as Indonesia’s Investor Despite Public Unease

JAKARTA, KOMPAS.com - Geopolitical shifts have moved at an unprecedented rate since the election of the United States’ (US) President Donald Trump in 2016.

Numerous economic and trade policies tilting further away from multilateralism and more inward-looking by the US has led to vast opportunities for China to spread its influence.

China’s Belt & Road Initiative sparked uproar among European governments concerned about China’s rising power in the West.

The West toiled over fears on democracy and free-market mechanisms with China’s growing prowess, but countries in Asia have welcomed the economic giant with open arms.

China has poured in substantial investments in emerging markets including Indonesia which has sparked problems with Asia’s leading investor, Japan.

Although China was missing as a top foreign investor in Indonesia prior to 2016, it has swiftly climbed up the ranking and is comfortably positioned near Japan and Singapore at the top.

Coordinating Maritime Affairs and Investment Minister Luhut Panjaitan explained Indonesia’s openness to working with China is because of the country’s free and active foreign policy.

The longstanding foreign policy encourages Indonesia to build positive relations with all countries which in turn supports Indonesia’s global position.

Indonesia is striving to develop its industry through stronger relations with China as it seeks to move up the global value chain.

The government’s plans have thus led to increased activities with China including the presence of more Chinese workers such as the 500 hired by two Indonesia-based nickel mining companies.

China’s communist political system is unnerving for some Indonesians and combined with Indonesia’s checkered past resulting from the Asian Financial Crisis of 1997-1998, closer China- Indonesia relations has not translated into public satisfaction.

Conspiracy theories and false accusations related to China have regularly shaped Indonesia’s political scene.

The fallout over former Jakarta Governor, Basuki Tjahaja Purnama’s blasphemy case worsened what was an already fragile ecosystem of ethnic diversity in the country.

Thus, it comes to no surprise that China’s growing involvement within Indonesia’s economy has left many uneasy, no matter the geopolitical significance.

However, China’s experience in manufacturing and in moving up its economy is poised to keep it at a close distance with Indonesia in the long term.

The ASEAN member-state has not yet built up a skilled working population and falls short on advancements in manufacturing technology as well as processes.

It is highly probable that Indonesia will continue to forge closer bilateral relations with China despite the public disapproval because the country will have to develop its manufacturing sector and its workforce. (Author: Muhammad Idris | Editor: Cantika Rustandi)

Source: https://money.kompas.com/read/2020/06/05/204334326/banyak-yang-nyinyir-soal- investasi-china-di-ri-ini-respon-luhut