JAKARTA, INDONESIA — As Lu Kang, the new Chinese Ambassador to Indonesia, vowed to promote cooperation between the two countries, what are the opportunities for Beijing to improve its ties with Jakarta?
China is one of Indonesia’s largest foreign trading partners and investors. Lu said in a tweet late last month that the trade volume between the two states reached US$32.76 billion in the first quarter of this year — following a year-on-year increase of 31.14%.
Indonesia’s Investment Ministry found foreign investments from mainland China and Hong Kong reached US$2.9 billion, comprising around 28% of foreign investments in the first quarter of this year.
Who is Lu Kang?
Indonesia was Lu’s first post in Southeast Asia. Trissia Wijaya, a PhD candidate in politics at Murdoch University’s Asia Research Centre in Australia, said the new envoy’s leadership would seem to “bring more significant changes than Xiao Qian,” his predecessor who now heads China’s embassy in Australia. Lu has served as the spokesperson for the Chinese Foreign Ministry.
“Lu's first step — opening a Twitter account and greeting Indonesian citizens — is commendable and shows a change in China's second-track diplomacy in Indonesia,” she told The News Lens. Lu opened a Twitter account as Beijing’s envoy in April.
Trissia, who focuses on Chinese and Japanese infrastructure investments in Indonesia, said China stated its interest in investing in the planned capital project, though she has not seen any significant follow-ups regarding the state capital development, “considering China has invariably promoted itself as a development partner for Indonesia.”
Backed by the parliament, Indonesia has launched an ambitious project to move its capital from Jakarta to East Kalimantan, on the island of Borneo.
Veronika S. Saraswati, convenor at the China Studies Research Unit of the Jakarta-based Centre for Strategic and International Studies (CSIS), said it was not a matter of who filled the position, as “the cooperation between the two countries was the most important thing.”
“Indonesia is actually seen as increasingly important for China. [It] has high strategic importance for China,” Veronika said.
She said the strategic interests comprised three aspects: historical factors dating back to China’s dynastic era, close geographical proximity, and Indonesia’s importance as a trading partner for China.
China’s investments in Indonesia
For Indonesia, the priority in the near future is twofold: pandemic recovery and attracting foreign investments, Trissia said.
“So far, China, through Huawei and the project in Morowali, has become a major player in the sector,” she said, referring to a region in Indonesia’s Central Sulawesi province with significant Chinese investments.
Indonesia’s upcoming general election in 2024 would be a “testament” to Lu’s ambassadorship.
“As we saw in 2019, the issue of China has often been a card for the opposition,” Trissia said, referring to Indonesia’s last general election that saw President Joko Widodo — popularly known as Jokowi — win his second term.
“Jokowi’s obvious pro-China stance in his first term pertaining to foreign investment and infrastructure development has attracted criticism, especially from the opposition [two-time presidential challenger and current Defense Minister Prabowo Subianto] side,” she said, referring to the Indonesian President’s time in office from 2014 to 2019.
Trissia said “China has often become the scapegoat,” among them as the cause of debt trap concerns in Indonesia. Some critics of Chinese investment cite examples of Sri Lanka, with which Beijing signed a 99-year lease for the port of Hambantota.
“China indeed was a card that could be used to stir public debate or gloss over the real problematic issues,” she said.
“Meanwhile, now we see that there are not so many dissents within the government coalition regarding Chinese investment in Indonesia, but we never know what will be happening next year,” she added.
The Jakarta-Bandung high-speed rail project, locally known as KCIC, “also left much homework for China in Indonesia,” referring to a 142.3-kilometer high-speed railway that connects both the Indonesian capital and the provincial capital of West Java in slightly more than half an hour.
“For example, who will handle the operation and management? If the Indonesian side is in charge, it means that there would be cost overrun while the consortium itself has been barely meeting the equity requirement,” Trissia said.
“It is predicted that the project would have not made any profit for the first 40 years. Then, who can guarantee profitability? State-owned enterprises, after all, are not charities.”
Set for a trial run at the end of this year, KCIC has been delayed several times due to lack of funding, technical issues and the pandemic. Driving between the two cities — passing through a highway — would normally take around two and a half to three hours.
“This project is also a lesson for China, especially in investments in infrastructure, apart from political turmoil, land constraints, machine specifications, financing and very specific technical issues,” Trissia said.
Yet, Veronika of CSIS said the current approach in managing Jakarta-Beijing ties would focus on economic interests first and put sociocultural aspects aside — instead of the other way around. She found prioritizing the people-to-people exchanges yield better results.
“Sociocultural is actually an important pillar for the strength of economic relations,” Veronika told The News Lens. “Economic relations will be stronger if this sociocultural aspect is strong,” she added. “The economy will follow.”
Trissia said Lu could focus on enhancing the second-track diplomacy between Beijing and Jakarta.
“Thus far, China has been relying on the Confucius Institute as part of its second-track diplomacy, but to be honest, it is not really impactful,” she said, referring to China’s educational and cultural centers that are run as Mandarin language centers in Indonesia.
“Having observed what he has been doing so far, perhaps Lu can pioneer a new round of Indonesia-China cozy relationship.”
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TNL Editor: Bryan Chou, Nicholas Haggerty (@thenewslensintl)
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