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On March 20, 2016, a Chinese coastguard vessel intruded into Indonesia’s territorial sea near the Natuna Besar Island, the largest island in Indonesia’s Natuna Islands located in the South China Sea. The coastguard vessel intended to stop a Chinese fishing vessel, Kway Fey 10078, from being towed by an Indonesian fishery patrol boat, KP Hiu 11, after the Kway Fey and her eight crew members had been arrested for fishing illegally in Indonesia’s exclusive economic zone (EEZ) that purportedly overlaps with China’s so-called nine-dash or U-shaped line claim in the area.¹ In response to Indonesia’s protest over the intrusion, China replied that its fishermen were “in traditional Chinese fishing grounds.”²

During the ensuing bilateral diplomatic row, Indonesia’s response did not seem to depart radically from its usual approach of downplaying incidents. Foreign and defense policymakers appeared to belittle the incident by referring to it as a mere “fishing dispute,” while  President Joko ‘Jokowi’ Widodo reminded his top security minister that China “remains Indonesia’s friend” in spite of the incident.³ Given the repeated accounts of such maritime incidents in the past, why does Indonesia keep downplaying their strategic significance? When and how will it stop minimizing the significance of the U-shaped line and the bilateral maritime incidents with China?

This commentary argues that downplaying the U-shaped line and the bilateral maritime incidents with China in the South China Sea reflects, if erroneously, diplomatic, economic, demographic, and strategic considerations in Indonesia’s relationship with China. However, Indonesia may adopt a tougher approach (stopping its downplaying of the U-shaped line and/or of bilateral maritime incidents) toward China when such downplaying increasingly contradicts the above considerations as it implements the Global Maritime Fulcrum (Poros Maritim Dunia, PMD) concept.

Indonesia’s Response to the Latest Natuna Incident

Both changes and continuities are apparent in Indonesia’s approach towards China in response to the latest Natuna incident. The most far-reaching change, arguably, was Indonesia’s official public criticisms of the incident through social media and the press. Shortly after the incident, the Indonesian Ministry of Fisheries (KKP) tweeted the incident chronologically in its press release.⁴ Unlike the previous ones, the latest incident attracted more public attention in criticizing the government’s approach, such as pointing out the inadequate military presence and maritime law enforcement patrols in the Natuna Islands.⁵ Another change was Jakarta’s stronger tone of protest against Beijing. Not only did it protest Beijing’s violation of Indonesia’s territorial sea, it also threatened to bring China to the international court of arbitration to contest the legality of the U-shaped line, following the Philippines, and asked China to return the Kway Fey while refusing China’s demand to release its crew.⁶

Notwithstanding the fact that the latest Natuna incident was the most provocative by far, Indonesia’s response continued to downplay the incident’s strategic significance. Three signs highlighted this attitude. First, Indonesia continued to put its relationship with China above and beyond the tensions generated by the maritime spats in the South China Sea. By not wishing to take the bilateral relationship hostage, Jakarta also showed its accommodation to China’s insistence on downplaying the latest incident. Second, Indonesia continued to emphasize that there were neither territorial nor maritime disputes with China.⁷ Its consistent denials of such disputes are meant to avoid lending Beijing’s U-shaped line any credence. Instead, Indonesia regarded the maritime incidents with China near the Natuna Islands as merely a “fishing dispute.” By arguing this, it seeks to downplay the potential strategic ramifications of the incident vis-à-vis China; it can concurrently avoid giving any sign of an Indonesian overreaction and continue with the bilateral relationship as business as usual.

Finally, Indonesia continued to exhibit a divergent response to China. The foreign ministry emphasized a more conciliatory legal-diplomatic approach to reject, and ask China to clarify, the U-shaped line, as well as renewed calls for agreement on a code of conduct.⁸ By doing so, Indonesia might have expected China to compromise on the U-shaped line by leaving Indonesian territorial waters alone. At the same time, despite the Indonesian defense and security establishments toeing the foreign ministry’s “non-claimant honest broker” line, they also complemented their approach by feigning a military response.⁹ Indonesia’s top security minister, Luhut Panjaitan, and defense minister, Ryamizard Ryacudu, have talked about improving the Indonesian military presence, particularly the navy and air force, in the Natuna Islands, including plans for the construction of a submarine base, upgrading Ranai’s airstrip, and deploying warships, fighter aircraft, combat helicopters, and air defense systems.¹⁰ The Indonesia Ministry of Marine Affairs and Fisheries (KKP) too plans to conduct more patrols in the EEZ near the Natuna Islands with bigger “Skipi” ships, despite some Indonesian security analysts erroneously arguing that the KKP has no authority to conduct such patrols.¹¹

Indonesia’s decision to downplay the latest incident in spite of its provocative nature begs a fundamental question: when and how does Indonesia define the “red line” from which it would begin openly confronting China? Answering this question would require one to first understand the underlying reasons why Indonesia responded to China the way it did.

Downplaying the U-shaped Line: Four Arguments

Diplomatic, economic, demographic, and strategic arguments might have compelled Indonesia to downplay the significance of the U-shaped line and the maritime incidents with China. On one hand, these arguments give Indonesia ample reasons to worry about the prospect of a deteriorating relationship with Beijing. On the other hand, these arguments might also have unnecessarily overestimated the importance of the Sino-Indonesian relationship that has led Jakarta to adopt flawed policy assumptions.

Although Indonesia has rejected, and asked China to clarify, the U-shaped line on several occasions, the diplomatic argument of Jakarta’s approach in the South China Sea purposefully avoids outright confrontation with Beijing. Indonesia’s diplomatic “downplaying” approach might have served two purposes. First, Indonesia seeks to avoid lending China’s U-shaped line more credence and publicity, which could compel the latter to adopt a more defensive and less compromising attitude.¹² As such, Indonesia wishes no “big fuss” about the U-shaped line, for in the words of former foreign minister Ali Alatas, “Repetition of an untruth will ultimately make it appear as truth.”¹³

Second, Indonesia endeavors to keep its diplomatic vanity in the image of a neutral “honest broker” among the claimants—the image Jakarta has been trying to portray since it began hosting the informal workshops on the South China Sea in the 1990s. Indonesia’s current ambassador to the United Kingdom and earlier adviser to Jokowi, Rizal Sukma, wrote in 1992 “for Jakarta to maintain its neutral peacemaking role.”¹⁴ Notwithstanding clear signs of China’s escalatory activities since then, the same author continued to reiterate in 2016 the need to “strengthen Indonesia’s position as a neutral party in the South China Sea dispute” as “an honest broker.”¹⁵

While downplaying the maritime incidents with Beijing might serve Indonesia’s best interest in the short run, it has become more problematic to maintain as Beijing’s maritime assertiveness grows stronger by the day. Indonesia may continue rejecting the U-shaped line, but mere rejections will not deter China from enforcing its claim through coercion and intimidation, including near the Natuna Islands. Diplomatically downplaying the latest incident as simply a fishing dispute can potentially miss the larger picture of Chinese strategic intent that seeks sea control in the South China Sea for distant power projection by partly using Chinese fishermen as proxies or “maritime militias” escorted by the Chinese coastguard.¹⁶ Moreover, it could also indirectly give Beijing diplomatic recognition of its rights in the “amenities of the sea,” including fishing, that come along with the U-shaped line.¹⁷ While the UN Convention on the Law of the Sea (UNCLOS) article 51 recognizes “traditional fishing rights,” Indonesia cannot accept China’s “traditional fishing grounds” argument since it fundamentally emanates from the U-shaped line, which Indonesia has consistently rejected.¹⁸

The economic argument dictates that Indonesia cannot afford to miss the opportunities presented with China’s rise as a global economic superpower. Given the potential economic stakes, Indonesia might have assumed it could not bear the prospect of China’s economic blackmail if relations were to deteriorate due to the South China Sea disputes. Such assumptions are not unjustified, for in 2015 China was Indonesia’s largest bilateral trading partner and its ninth largest foreign investor.¹⁹ Chinese investment is also central to Indonesia’s infrastructure development, especially in the maritime sector, as part of the PMD’s policy goals. Jokowi’s policy focus, if myopic, on infrastructure development made the China-funded USD 5.5 billion high-speed rail project between Jakarta and Bandung the jewel in the Chinese investment crown.²⁰

A cursory assessment of Indonesian trade and FDI (foreign direct investment) inflows also reveals that Jakarta might have overlooked the challenges in its economic relations with Beijing and overestimated their potential value in comparison to other economic partners. Under the China-ASEAN free trade agreement (FTA), bilateral trade deficits have risen threefold since 2010, which resulted in worker layoffs and a flood of cheap consumer goods that stymied the growth of Indonesian manufacturers.²¹ In 2015, trade deficits with China accounted for more than a third of the total bilateral trade value (see Table 1). Chinese investment in Indonesia must also face the challenges of corruption and bureaucratic red tape, and much of it went to the extractive industries, such as the mining and energy sectors, that do not add significant value to Indonesia’s exports.²²

Indonesia might have underestimated the significance of alternative economic partners. Its trade with India, Japan, the European Union, and the United States in 2015 gained a combined surplus of around USD 26.5 billion, or more than half of the total bilateral trade value with China (see Table 2). Moreover, China’s total FDI inflows to Indonesia in 2010-2015 pale in comparison to those of Japan, which are more than double those of all the EU countries combined. Following Jokowi’s visit to Tokyo in March 2015, Japan’s investment is set to increase, amounting to a total of USD 5.6 billion.²³ As if compensating for its lost bid in the Jakarta-Bandung high-speed rail project, Japan has also vied for a USD 3.09 billion deep-sea port project in Subang, West Java.²⁴ Economic ties with the United States could likewise provide an alternative source of funding for PMD. During Jokowi’s visit to Washington in October 2015, the two countries signed a memorandum of understanding on fishing, marine science and technology, and port security.²⁵ A closer scrutiny of Indonesia’s economic relations with China and its alternative economic partners suggests that the potential cost of Chinese economic blackmail against Indonesia seems to be overblown.

The demographic argument underlines the sensitivity of Sino-Indonesian relations in light of the presence of ethnic Chinese communities in Indonesia. A deteriorating relationship with China could render the Indonesian ethnic Chinese minority a vulnerable target of discrimination, if not oppression. Believed to control the largest slice of Indonesia’s economic pie, the Chinese-Indonesians have historically been politically and socially discriminated against, because they were accused of  being Beijing’s stooges or “fifth column” in Indonesia’s national political scene.²⁶ Experiences of interracial riot between indigenous or pribumi Indonesians and the ethnic Chinese minority, and a history of Indonesian discriminatory policies against the latter, particularly those implemented by President Suharto, present a legitimate cause of concern. Rocking the “China” boat could, thus, upset Indonesia’s interracial harmony by providing more fuel for those wishing to ignite pribumi sentiments against the Chinese-Indonesians. Although post-Suharto Indonesia has ceased all discriminatory policies, two lingering concerns remain: first, the ethnic Chinese conglomerates would channel large amounts of financial resources to mainland China, and second, Beijing would use the ethnic Chinese community’s economic clout in Indonesia to influence and manipulate domestic Indonesian politics.²⁷ Indeed, China is the second largest recipient of Indonesia’s FDI outflows after Singapore, and, in 2010 China replaced Singapore as the largest holder of Indonesia’s FDI stock abroad (see Table 3).

The demographic argument might have overlooked the pribumi’s anathema against anti-Chinese identity politics in the democratic Indonesia of today. While loathsome, the exploitation of primordial forces to score domestic political gains is not uncommon in liberal democracies, including in Western countries such as in the 2016 US election campaign. The politics of pribumi identity likewise came to the fore in the election of Jakarta’s first ethnic Chinese governor, Basuki “Ahok” Purnama.²⁸ However, the fact that many pribumi voted for Ahok also demonstrated their political sophistication not to succumb too easily to the divisive narratives of pribumi identity politics. Furthermore, access to the global news cycle has enabled the pribumi to understand the political independence of ethnic Chinese from the People’s Republic of China, such as by following Beijing’s complicated relationships with other ethnic Chinese majority countries, such as Singapore, Taiwan, and to a lesser extent, Hong Kong. Although anti-Chinese pribumi might still be keen to exploit any crisis in Sino-Indonesian relations for political gains, the absence of such a crisis would compel those pribumi to simply find other reasons to justify their anti-Chinese narratives. The pribumi identity politics will therefore remain as one of Indonesia’s many political ills irrespective of the Sino-Indonesian dynamics. Moreover, Chinese Indonesians, or Tionghoa, see China’s economic rise from “rational business considerations” only in which Mainland China is just one of the places available for business rather than a place to which they have strong emotional ties. The popularity of China as a place for investment is not very high since most of the Tionghoa have little knowledge of the country. Indonesia is still the most popular choice since they know the country well. This view expresses pragmatic thought rather than an ideology of loyalty towards China. To some extent, emotional ties exist among the Tionghoa but not between Tionghoa and Mainland Chinese or other Overseas Chinese. The Tionghoa tend to identify themselves as Chinese Indonesian rather than Indonesian Chinese.²⁹

Finally, the strategic argument assumes that a stronger push against the U-shaped line would inevitably put Indonesia in direct opposition to Beijing and force it to align closer with the United States and other like-minded states wary of China’s growing maritime assertiveness. This would violate the non-alignment that is central to Indonesia’s “independent and active” foreign policy principle: “independent” to conduct foreign policy in accordance to its national interests and without pressure from foreign powers, while remaining “active” to strive for the preservation of world peace and stability.³⁰ A violation of non-alignment could limit Indonesia’s options to gain the maximum possible benefits from pragmatic cooperation with all major powers, including China.³¹

Jakarta’s assessment of the strategic dimension might also underestimate the real extent of its maneuverability. While Indonesia can adopt a tougher approach vis-à-vis China, it does not have to display a zero-sum equation: a harder push by China against Indonesia does not necessarily lead to more gains for the United States.³² Rather, Jakarta’s approach would still be pragmatic. A more careful reading of Indonesia’s foreign policy reveals that non-alignment is not equivalent to neutrality.³³ Rather, the “independent and active” principle of foreign policy, including non-alignment, is only a means to an end. ³⁴ Instead of maintaining equidistant relationships between the United States and China (which neutrality implies), Indonesia’s foreign policy can dictate more nuanced relationships with the major powers based on the degree of alignment with Indonesia’s security interests.³⁵ Chinese assertiveness in the South China Sea can therefore bind Indonesia and the United States together in a marriage of convenience without transforming Jakarta into a formal ally of Washington.

A Tougher Approach Against China in the South China Sea?

Launched by Jokowi in November 2014, the PMD concept rests on five policy pillars: rebuild maritime culture, manage maritime resources, develop maritime infrastructure and connectivity, advance maritime diplomacy, and improve maritime defense.³⁶ The latest Natuna incident has revealed four glaring contradictions in the PMD concept that might only be reconciled by Indonesia adopting a tougher approach against China in the South China Sea.

The first contradiction stems from Indonesia’s suppression of foreign illegal, unreported, and unregulated (IUU) fishing as part of its efforts to manage maritime resources. Indonesia’s fishery minister, Susi Pudjiastuti, criticized the latest incident as China’s “arrogant” attempt to “obstruct” Indonesia’s law enforcement efforts against IUU fishing.³⁷ On the other hand, China insisted that the incident was not a case of IUU fishing as it took place within its so-called “traditional fishing grounds,” and, thus, Indonesia could not stop future Chinese fishermen from operating in the area, especially in light of China’s growing seafood consumption in the coming years.³⁸ Notwithstanding the irreconcilable differences between the two countries, confronting Chinese government support toward their fishermen would, therefore, seem the only plausible policy if Indonesia were to maintain its credibility in suppressing foreign IUU fishing.

The second contradiction resides in the PMD’s policy pillar maritime infrastructure and connectivity that is related to China’s Twenty-first Century Maritime Silk Road. China has offered Indonesia financial assistance to build its maritime infrastructure funded by the China-ASEAN Maritime Fund.³⁹ However, Jokowi’s seemingly single-minded focus on infrastructure development could lead Indonesia to overestimate the risk of deteriorating ties with China and increase Indonesia’s vulnerability in the face of Chinese economic blackmail. A tougher approach against China would enable Indonesia to maintain a nothing-to-lose attitude and capitalize on the opportunities presented by alternative economic partners: while Chinese economic assistance is valuable, it is not indispensable. There was even a suggestion to “evaluate” Sino-Indonesian cooperation projects in response to the latest Natuna incident.⁴⁰

The third contradiction revolves around Indonesia’s maritime diplomacy agenda to manage tensions and disputes in the South China Sea. Apart from the informal workshops in the 1990s, Indonesia’s “honest broker” role has taken the shape of a facilitator to implement the 2002 Declaration on the Conduct of Parties (DoC) and formulate a Code of Conduct (CoC).⁴¹ Yet the latest incident has questioned Indonesia’s assumptions on whether there is still good faith left on China’s part to negotiate the DoC and CoC with ASEAN. Susi felt that China had “interrupted and sabotaged” Indonesia’s efforts to act as an honest broker among the claimants, while security minister Luhut threatened to bring China to the international court of arbitration.⁴² A tougher approach against China would not relinquish Indonesia’s honest broker role, but augment it with a necessary dose of scepticism whenever China’s “checkbook diplomacy” tries to charm Indonesia. Since China seems already bent on a “legal collision course” by insisting on the U-shaped line vis-à-vis UNCLOS, Indonesia could also push for a common ASEAN position to collectively and consistently reject the U-shaped line and Chinese attempts to enforce it.⁴³

Finally, the fourth contradiction is linked to the maritime defense pillar of PMD, where Indonesia has not expanded maritime defense and law enforcement presence in the Natuna Islands permanently, notwithstanding the fact that maritime incidents with China had occurred at least three times (2010, 2013, 2015) prior to 2016 and that China had gradually increased its military and paramilitary presence in the South China Sea since the mid-1990s. While military exercises had been held frequently in the area since 1996, military combat and surveillance assets are neither adequately nor permanently stationed in the Natuna Besar Island, except for ground-based air defense radar. In 2015, Indonesia allocated IDR1.3 trillion to upgrade its military base in the Natuna Besar Island and accommodate a joint navy-air force command, which will be completed by 2017, akin to the US “Pearl Harbor” military base.⁴⁴

A more muscular approach would further confirm Indonesia’s anxiety about China’s strategic intentions in the South China Sea, particularly the Natuna Island, and increase the risk of hostile maritime encounters with Chinese fishermen, if not their coastguard escorts. Pursuing this approach would signal to China Indonesia’s preparedness to escalate in response to future maritime incidents, which might eventually draw the two countries into an action-reaction cycle reminiscent of that between China and the ASEAN claimant states—a situation which Indonesia has hitherto been trying to avoid.

Conclusion

The South China Sea disputes remain a contentious issue in Sino-Indonesian relations for diplomatic, economic, demographic, and strategic considerations. This is why Indonesia responded to the March 19-20, 2016 incident near the Natuna Islands by downplaying it as a mere fishing dispute and sought to ensure there would be few or no adverse consequences to the wider bilateral relationship. Despite the bilateral diplomatic row following the incident, Indonesia’s response did not signal a radical departure from the present approach.

Yet, a more assertive China in the South China Sea could also compel Indonesia to stop downplaying the U-shaped line and future maritime incidents and to pursue a more confrontational approach. Increased Chinese maritime assertiveness could create irreconcilable contradictions with Indonesia’s attempts to implement the PMD concept. A more confrontational approach, however, would also expose Indonesia to an action-reaction cycle with China that it has hitherto been trying to avoid.