Prabowo's Hyperactive Diplomacy Masks Indonesia's China Bind — SkimNews
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- Prabowo Subianto has visited nearly 30 countries since taking office in October 2024, steered Indonesia into BRICS, and presented himself as a would-be mediator in conflicts from Ukraine to Gaza to Iran, matching the travel volume of predecessor Joko Widodo over nearly a decade in office.
- Indonesia faces acute fiscal strain under Prabowo, with the 2025 budget deficit widening to 2.9% of GDP — the country's widest non-pandemic shortfall in two decades — and the rupiah plunging to historic lows as one of the world's worst-performing emerging-market currencies.
- China has been Indonesia's largest trading partner since 2013, with two-way trade surpassing US$160 billion in 2025, more than 30% of Indonesia's total foreign trade, while the China-Hong Kong bloc has risen to rival Singapore as the country's top source of foreign capital through Belt and Road-linked investment.
- Indonesian textile and garment manufacturing has been devastated by cheap Chinese imports — the bankruptcy of household-name Sritex and shuttering of dozens of factories displaced hundreds of thousands of workers in Java, but Jakarta avoided imposing safeguard tariffs out of fear of Chinese retaliation and capital flight.
- Mining quota and royalty hikes proposed under Prabowo's intensified resource-nationalist agenda drew a rare blunt protest letter from the China Chamber of Commerce in Indonesia directly to the president in May 2026, after which senior ministers quietly postponed planned mineral royalty hikes and entertained case-by-case quota adjustments.
- Chinese Foreign Minister Wang Yi visited Jakarta in August 2026 and publicly called on Indonesia to provide a 'safe, stable, and favourable business environment' — a demand Jakarta has effectively conceded by establishing a Presidential Decree No. 4/2026 investment acceleration task force to expedite Chinese-linked projects.
- Jakarta has stayed largely silent on the socio-environmental fallout — captive coal plants, deforestation, toxic runoff, poor labour safety — at Chinese-dominated nickel hubs in Central Sulawesi and North Maluku, treating domestic ecological damage as an acceptable cost of securing continued Chinese capital.
Why it matters: With the rupiah at historic lows and no alternative partner large enough to offset the shortfall, Jakarta's ability to credibly mediate global conflicts now runs through the very kind of great-power leverage its 'free and active' doctrine was designed to avoid — and the cost of that concession is being paid by Indonesian factory workers and communities near Chinese-funded nickel operations who absorb the social and environmental fallout without recourse.
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