Indonesia’s Emerging China Dependencies — SkimNews
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- Indonesia moved furthest toward China relative to the United States among major ASEAN states from 1995 to 2024, per the Anatomy of Choice Alignment Index, with the shift overwhelmingly economically driven by inbound investment flows.
- BYD captured nearly 50 percent of 2025 Indonesian EV wholesales as Chinese brands overwhelmingly seized that year's market, with EV sales surging to over 10 percent of the total automotive sector.
- Japanese automakers like Toyota, which had dominated Indonesia through decades-old manufacturing and dealer networks, are seeing their share fall—with Honda posting particularly severe drops—as Chinese capital penetrates the entire nickel-to-vehicle pipeline.
- China's Huayou replaced South Korea's LG Energy Solution as lead investor in a massive Indonesian EV battery project after LG withdrew last year, leaving Chinese firms dominant across upstream extraction and midstream processing of the country's world-leading nickel reserves.
- Indonesia's 5G networks rely heavily on hardware from Huawei and ZTE, building a digital infrastructure optimized for Chinese technical standards, personnel, and a broader potential smart-city governance package.
- Indonesian public opinion has swung dramatically toward Beijing when asked to choose between Washington and China, as trust in the United States has collapsed—though Japan still narrowly edges out China in trust levels.
- Indonesia's security partnerships with the United States, Japan, and Australia remain more extensive than its defense cooperation with China, but Jakarta's growing accommodation on flashpoints like Taiwan and the South China Sea signals real, not rhetorical, drift.
- Jakarta's defense diversification has become so sprawling—spanning the US, China, Russia, and Turkiye—that military effectiveness and readiness are now described as "mediocre," undermining security ties as a counterweight to China's economic entrenchment.
Why it matters: Indonesia is ASEAN's only G20 member and a critical node in global mineral supply chains, so a functionally China-aligned Jakarta carries regional weight far exceeding smaller swing states. With Chinese firms now controlling the full nickel-to-EV pipeline, 5G infrastructure, and public sentiment tilting Beijing-ward, the material basis for Indonesia's "free and active" foreign policy is eroding—precisely when US allies like Japan are scrambling to retain relevance against Chinese dominance.
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