Indonesia-China economic relations post the 1997 Asian crisis

Abstract

Indonesia and China have been in bilateral economic relations earlier. However, since the 1965 movement, Indonesia and China have experienced suspicion-colored diplomatic relations although they were economically dependent on each other. After the Asian economic crisis in 1997, China emerged as a “rising player” in the regional and bilateral economy. Despite different views on China’s economic power and its impacts, both directly and indirectly, on the national and regional interests, China’s global economic power is characteristically linked to China’s free trade, market expansion strategy at all levels, and economic diplomacy. Due to different national interests as well as political and economic systems, Indonesia and China were not always “equal” in their relations. Indeed, Indonesia seemed to be relatively unable to make the best use of China’s rising economy. In other words, China is an economic entity whose existence is almost always taken into consideration in the development processes of Indonesia (nationally and bilaterally) and ASEAN (regionally, subregionally, and multilaterally). Nonetheless, the ACFTA is likely unfavorable for Indonesia’s economic actors, especially entrepreneurs, traders, and manufacturers.