Indonesia's China Policy in the New Order and Beyond: Problems and Prospects

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This article examines Indonesia's perceptions and policies towards China during the New Order era (1965-99) and the prospects for bilateral relations in the post-New Order period. For the first two decades of President Soeharto's rule, Indonesian policy towards China was marked by hostility, and stemmed from the 1965 Gestapu Affair. Bilateral relations remained frosty until the mid-to-late 1980s when Soeharto initiated a gradual policy of rapprochement with China. This led to the restoration of diplomatic relations in 1990 and Indonesia's policy of engagement with China. Despite improved economic relations, a number of obstacles stood in the way of closer Sino-Indonesian relations in the 1990s. The new government of President Abdurrahman Wahid must tackle these obstacles if bilateral relations are to move forward in the twenty-first century

Introduction

Relations between Indonesia wad the People's Republic of China (PRC) were characterized by hostility and suspicion during much of the New Order era, and witnessed only a gradual improvement in the 1990s. In 1967, a year after Soeharto became President, Indonesia suspended diplomatic relations with the PRC in retaliation for Beijing's alleged involvement in the 1965 Gestapu Affair, an abortive coup attempt carried out by elements of the Indonesian Communist Party (PKI), and seen by the Indonesian Armed Forces (ABRI) as an attempt by Beijing to turn Indonesia into a communist client state. For the next twenty years, the Indonesian leadership spurned all contact with the PRC, believing China's ultimate ambition was to assert hegemony over Southeast Asia by supporting regional communist insurgency movements, or through overt military action. Because Chinese Indonesians were also implicated in the coup, the ethnic Chinese community suffered widespread discrimination and persecution during Soeharto's rule.

Bilateral ties improved gradually from the mid-1980s onwards, motivated by domestic factors in Indonesia and China's more pragmatic foreign policy under Deng Xiao-ping. Direct trade between the two countries was restored in 1985, and diplomatic relations in 1990. Jakarta's new policy of engagement with China encouraged greater economic and political ties, a policy seen as beneficial to Indonesia's economic development and regional stability. Indonesia's policy of engagement helped improve bilateral relations, but a number of obstacles lay in the path of closer Sino-Indonesian relations. Firstly, the Indonesian leadership remained opposed to the communist ideology and continued to warn of the dangers of communism and a revival of the PKI. Secondly, discrimination against the ethnic Chinese community remained rife in the 1990s. This occasionally strained relations with Beijing, especially when racial tensions turned to violence. Thirdly, Indonesia's suspicions of China's regional intentions were reinforced by the PRC's increasingly assertive behaviour in the South China Sea. The Indonesian leadership was particularly concerned at China's claim over the territorial waters surrounding the Natuna Islands. The prospects for an improvement in bilateral relations seemed bright following the election of President Abdurraliman Wahid in October 1999. However, the existence of racial tensions, the continuing influence of the armed forces, and the unresolved territorial dispute present significant obstacles in the path of improved Sino-Indonesian relations.

Background: Sino-Indonesian Relations, 1965-85

In order to understand Indonesian perceptions and policies towards the PRC during the New Order era, it is necessary to outline the strained relations between the two countries during the period 1965-85. During the latter period of President Soekarno's rule, relations between Indonesia and China had grown closer as both countries pursued radical anti-Western and anti-imperialist foreign policies. Domestically, Soekarno relied heavily on the support of the Indonesian Communist Party (PKI), which itself had close links with the Chinese Communist Party (CCP). …