Xi Jinping’s reelection may help Indonesian economy, but protests may worsen anti-Chinese sentiments

Chinese President Xi Jinping has been reelected as the Secretary General of China Communist Party (CCP), making him secure an unprecedented third term as the country’s leader.

A recent study by Indonesia-based research institution LAB45 has indicated that Xi’s reelection may bring economic benefits to Southeast Asian countries, especially Indonesia. China and Indonesia have a strong trading relationship in the energy sector, especially coal, which is of course as a key producer of greenhouse gases has been targeted by the international community for “phasing down”.

However, Indonesia cannot turn a blind eye to what is currently happening in China – from massive protests against the government’s prolonged lockdown policy to repressive acts by the Chinese security forces against civilians.

The crisis in China could also further increase the anti-China sentiment in Indonesia, which has worsened lately. This phenomenon could possibly create instability in the country’s domestic politics, particularly ahead of the 2024 presidential election, of which experts have warned on the re-emergence of identity politics.

What’s happening in China

The Chinese government’s strict lockdown policy in the past three years has put its people in difficult times. Subsidies from the government during the lockdown are very limited. The unemployment rate is growing. People are losing income and can’t afford basic needs.

The situation was exacerbated when a fire broke out in Urumqi, Xinjiang, killing ten people. Some media reported that the COVID-19 lockdown measures had hampered the rescue efforts. This has sparked massive protests.

The protests occurred in various cities in China, from Beijing, Chengdu, and Guangzhou, to Wuhan, with people flocking to the streets to criticise the government. Information circulating on social media reported that many protesters were sought by Chinese security forces, even though they did not commit acts of violence.

Many Chinese people can only access information from state-controlled media, which gave little information about the protests. Chinese communities across the world also protested against China’s unresponsive actions towards the fire incident and President Xi’s zero-COVID policy.

How the crisis can affect Indonesia

Singapore-based ISEAS-Yusof Ishak Institute conducted a survey called Indonesian National Survey Project in July 2022 of 1,600 Indonesian respondents of various gender, age, region, ethnicity and religion. The survey revealed that almost 25.4% of the respondents considered that the rise of China would negatively impact Indonesia.

Only 30% of respondents believed strengthening relations with China would benefit Indonesia, while 46% thought Saudi Arabia could be a more promising partner.

The survey also shows that people’s positive feeling towards China has declined to 66% in 2020 from 76.7% five years ago. As many as 41.5% of respondents are worried about Indonesia’s involvement in China’s Belt and Road Initiatives (BRI) project. They think BRI can create a debt trap for Indonesia and other countries. Crises in Sri Lanka have bolstered this perception.

Negative sentiment grows not only towards the Chinese government but also toward Chinese descendants in Indonesia. As many as 41% of respondents think that Chinese descendants are still loyal to China.

Therefore, the impact of protests in China, and government responses to them, could be problematic to those of Chinese-Indonesian ethnicity. Sentiments against Chinese descendants have long been rooted in Indonesia.

Identity politics played hevily during the 2017 Jakarta gubernatorial election, where ethnic Chinese and Christian former governor Basuki Tjahaja Purnama – popularly known as Ahok – faced racist opposition.

In December 2016, such sentiment – in addition to a blasphemy claims – had triggered hundreds of thousands of conservative Muslims to gather in the capital Jakarta to protest against Ahok during the election campaign.

Identity politics reemerged during the 2019 presidential election because incumbent candidate President Joko Widodo was known as Ahok’s ally, while his contender, former general Prabowo Subianto, was endorsed by a majority of conservative Muslim groups.

So identity politics caused by anti-Chinese sentiment could impact the country’s political stability. While this may not overtly affect China-Indonesia relations, for China, Indonesian political stability is crucial in terms of the economy.

Xi’s leadership and Indonesia

Despite all this, under President Xi’s leadership, China-Indonesia relations have grown stronger. As many as 72 respondents thought that China was still an important country economically for Indonesia, particularly in the energy sector, according to the ISEAS-Yusof Ishak Institute survey.

At the 2020 UN general assembly, President Xi announced the Double Carbon policy, a commitment to reach peak carbon use by 2030 and to be carbon-free by 2060.

However, to maintain energy stability to fulfil domestic needs before achieving carbon neutrality, China still needs fossil energy and depends on coal as a source. Indonesia is the world’s biggest coal exporter by tonnage. It will benefit economically, particularly since China bans coal imports from Australia.

Indonesia has become China’s largest coal supplier. Throughout 2021, China imported nearly 177 million tonnes of coal, or 74% of its total coal imports, from Indonesia.

China also needs Indonesia as a friendly country to help expand its geopolitical influence in Asia. China may offer various cooperative initiatives, including in the economic and development fields.

This could be an opportunity to serve Indonesia’s national economic interests. As a country eyeing to play a more prominent role in global affairs, having robust cooperation and support from China – the world’s second-largest economy – is crucial, especially with the decline of the US in Southeast Asia in recent years.

However, Indonesia needs to consider and anticipate an increasingly uncertain international environment, especially in the uneasy political dynamics evolving between China and the US.

Indonesia must be cautious in taking positions and responding to international turbulence. Its “free and active” foreign policy may help Indonesia chart a course through the middle.