Indonesia is preparing for President Prabowo Subianto’s administration, meanwhile nation faces critical risks associated with deepening economic ties to China. Although Chinese investment has partially strengthened Indonesia’s infrastructure and manufacturing sectors, this dependence poses a major threat to national sovereignty and financial stability.
Prabowo has previously criticized Chinese investment, reflecting current national concerns about sovereignty and economic independence. This is not unfounded. Major projects such as the Jakarta-Bandung high-speed railway, financed by Chinese capital, risk creating debt dependency and financial imbalances.
Indonesia’s recent decision to impose tariffs of up to 200% on Chinese goods underlines the protective focus on our economy. This move is to protect micro, small and medium enterprises (MSMEs) from being flooded with cheap Chinese imports. In addition, the presence of Chinese workers has led to labour disputes, raising social and ethical concerns.
Chinese aggression, especially in the South China Sea, increases these risks. China’s aggressive territorial claims are incompatible with Indonesia’s exclusive economic zone around the Natuna Islands, which threatens Indonesia’s sovereignty. Strengthening maritime defence and increasing regional cooperation through ASEAN are necessary, albeit complex, strategies.
Here in Indonesia, public attitudes towards Chinese investment are mostly negative. Many Indonesians, while recognising the economic benefits, are concerned about the socio-political implications. A significant part of the population expresses concern about China’s growing influence.
Prawobo has been criticized in the past for being inconsistent in his views. As his administration navigates this difficult environment, Indonesia must prioritize sovereignty, economic independence, and social stability. Reducing dependence on Chinese investment, where necessary, is essential for sustainable and equitable growth. The future of Indonesia-China relations depends on a balanced and cautious approach to foreign investment to safeguard national interests.
