Indonesia and China signed a $10 billion trade agreement in Beijing in the areas of food, new energy, particularly in green transition sectors such as new energy vehicles, lithium batteries , photovoltaics and data technology. The agreement was signed after Indonesian President Probowo Sabiantos' first overseas visit to China after his election as president.
The fact that he chose China as his first official overseas destination is significant. This comes at a crucial time for China when Donald Trump was elected president of the United States. Trump has been rather hostile to China on trade issues more than on foreign policy issues such as Taiwan or China's support for Russia in the war in Ukraine.
President Prabowos' statement after his meeting with Chinese President Xi Jinping is of particular significance. Prabowo said: “We must set an example by showing that in our times, cooperation and not confrontation is the path to peace and prosperity. Indonesian leaders have decided not to engage in the cold war raging between China and the United States.
Geographically, Indonesia's proximity to China determines its international economic policy decisions. China also seeks to build strong international ties to counter diplomatic and political hostility from the United States. Not only is Indonesia the fourth most populous country in the world, after India, China and the United States, but it also has the largest deposits of nickel, a mineral essential in new green technologies emerging in the world. world economy. Interestingly, Chinese internet giants Alibaba and Tencent had previously invested in Indonesian technology company Go To Gojek Tokopedia.
It is a well-established principle that geopolitics depends on the pressures exerted by geoeconomics. China and the Association of Southeast Nations (ASEAN) are, in many ways, geographical neighbors. Not all ASEAN members are in favor of establishing closer ties with China, except the United States and other Western countries.
ASEAN members want to keep their doors open to both China, the United States and everyone else. This is why, at the G20 summit in Bali in 2022, the then Indonesian president, Joko Widodo, clearly refused to be drawn into the camps. Thus, Indonesia and many other countries in the region will maintain an open door policy towards China.
The Philippines, Malaysia and Vietnam have conflicting territorial claims with China in the South China Sea. Vietnam, despite its differences, maintains closer relations with China. The example of Indonesia's economic collaboration with China shows that trade determines foreign relations more than politics and ideology. The Americans have also been rather pragmatic in their relations with ASEAN, despite their attempt to create an Indo-Pacific sphere of influence. The economic ties between the United States and Vietnam are a good example.
Indonesia is well aware that economic ties with China transcend trade. That is, Chinese President Xi emphasized that China-Indonesia relations represent the global South and recalled that this year marks the 70th anniversary of diplomatic relations between the two countries and next year will mark the 70th anniversary of the Conference of Bandung of Afro-Asian diplomatic relations. nations hosted by Indonesia. China is aware of the importance of the Global South and wants to be seen as the champion of developing economies and emerging markets.
The Chinese are aware of the power struggle between advanced Western economies led by the United States and countries in Asia, Africa and Latin America, and they want to be seen as leaders of the Global South. As the second largest economy after the United States, it is not surprising that China is well aware of its own strength and the importance of its economic and diplomatic relations with other countries.