China’s Jakarta Visit: A Test of Economic Ties and Governance Reform

The recent visit by Chinese Foreign Minister Wang Yi to Jakarta is a significant development in the complex web of economic and diplomatic ties between China and Indonesia. The meeting has been touted as a reaffirmation of strong economic commitments, but it also highlights some of the challenges that have plagued this relationship in recent years.

One key issue that arose during the visit was the performance of large-scale projects like the Jakarta-Bandung high-speed railway. Despite initial fanfare and significant investment from China, the project has struggled with low passenger volume and ballooning costs. Wang Yi’s statement that “Whoosh must move forward” suggests a willingness to explore alternatives to boost passenger numbers, which may be welcome news for investors in Indonesia. However, it also underscores some of the underlying problems with this project.

The Jakarta-Bandung high-speed railway is part of China’s ambitious Belt and Road Initiative (BRI), which has been touted as a game-changer for economic cooperation between Beijing and its partner countries. Several BRI projects have faced criticism over issues like transparency, environmental impact, and labor practices. Indonesia’s own BRI portfolio includes several projects that have raised concerns about governance and accountability.

A recent letter from the China Chamber of Commerce in Indonesia to Indonesian President Prabowo Subianto shed light on some of these challenges. The letter warned about abrupt policy shifts and alleged extortion by officials, which have undermined confidence in Indonesia’s business environment. Wang Yi’s statement that “Indonesia has pledged to continue providing a fair, transparent and favorable business environment for Chinese enterprises” is a welcome commitment, but it remains to be seen whether this pledge will translate into concrete reforms.

The visit also highlights the delicate balancing act that Indonesia must perform in its diplomatic relationships with major powers. As Teuku Rezasyah, an international relations expert at President University, noted, “Indonesia maintains this type of dialogue mechanism with only two other countries: Australia and the United States.” The 2+2 format meeting between Wang Yi and Indonesian Defence Minister Sjafrie Sjamsoeddin may have been a significant step in deepening strategic cooperation, but it also underscores Indonesia’s need to navigate complex alliances in a rapidly changing global landscape.

The future of China-Indonesia economic ties will depend on several factors, including the government’s ability to address governance concerns and ensure transparency and accountability. The Prabowo administration has drawn closer to Beijing in recent years, but this rapprochement must be balanced with robust engagement with Washington and other key partners. As Rezasyah noted, “Each country should be left feeling it has brought Indonesia into its orbit, even as Indonesia reaps the advantages of both relationships.”

As China’s economic presence continues to grow in Southeast Asia, it is essential for countries like Indonesia to prioritize good governance and transparency in their partnerships with Beijing. The recent visit by Wang Yi may have reaffirmed some economic commitments, but it also serves as a reminder that these relationships must be built on a foundation of trust, mutual respect, and clear communication.

In the coming months, we can expect further developments in China-Indonesia relations, including potential reforms to address governance concerns and improve transparency. Indonesia’s balancing act between Beijing and Washington will continue to shape its economic policies and diplomatic engagements with major powers. As this delicate dance unfolds, it remains to be seen whether Indonesia can strike the right balance between economic cooperation, governance reform, and strategic diplomacy.