Key Cooperative Research Institute for Policy Studies of the Ministry of Foreign Affairs of the P.R.C (2022-2024)

Zou Zhiqiang,“Time for more Asia's moments”


(Sourse:China Daily Global,2023-08-03)

A decade after establishing a comprehensive strategic partnership, China and Indonesia face new opportunities for cooperation in global economic governance

As the largest economy in the Association of Southeast Asian Nations and a member of the G20, Indonesia is a major player in the Asia-Pacific region as well as the global arena. China and Indonesia, both influential developing countries, are important forces pushing the advancement of global economic governance and cooperation among emerging countries.

In 2013, the two countries established a comprehensive strategic partnership, and in the same year, China proposed the 21st Century Maritime Silk Road in Indonesia, showing the priority the Southeast Asian country enjoys in China's diplomatic agenda and the key position it holds in promoting Belt and Road cooperation.

In global economic governance, China and Indonesia share common interests and similar stances on many issues, and both are seeking reform of the global economic governance architecture. The alignment between China-proposed Belt and Road Initiative and Indonesia's Global Maritime Fulcrum strategy, coupled with the rise of new platforms such as the Asian Infrastructure Investment Bank, has provided new impetus and opportunities for the two countries to cooperate in global economic governance.

First, China and Indonesia are committed to safeguarding free trade and are opposed to protectionism. The two countries have carried out cooperation in diversified areas such as pushing regional and global trade facilitation under the framework of the China-ASEAN Free Trade Area and the Regional Comprehensive Economic Partnership, and have jointly fought against trade protectionism by some developed countries and the rising anti-globalization tide.

Second, China and Indonesia have made institutional arrangements in providing financial backing for infrastructure and capacity cooperation, and are supporting each other in pushing reforms of international organizations such as the International Monetary Fund and the World Bank. They worked together to put the issue of the stability of US monetary policy on the agenda of the G20 in a bid to create a favorable global financial environment for emerging economies. China has provided Indonesia with diversified financing channels, and the two countries have signed and extended their currency swap deal.

Third, China and Indonesia are leading global collaboration in infrastructure building. Both countries view sound infrastructure as a critical foundation for global economic development, and have proposed various investment fund initiatives or banks for infrastructure development. The two countries endorse the inclusion of infrastructure investment as a key topic on the G20 agenda. And Indonesia, as one of the founding members of the Asian Infrastructure Investment Bank, holds an important position in the international financial institution, and has proactively supported the construction of the bank.

Fourth, in regional economic governance, China and Indonesia play key roles in driving the economic governance of the ASEAN and the entire Asia-Pacific region. China is committed to building a free trade zone with ASEAN countries and forging collaboration mechanisms at a higher level, and pursues expanding RCEP cooperation to more areas. The two countries are jointly advancing regional trade and investment facilitation as well as economic integration to build a China-ASEAN community with a shared future.

Fifth, under the framework of the G20, China and Indonesia are jointly opposing trade protectionism, and working closely to push for reform of the global financial architecture to better protect the interests of emerging countries. In the G20 summit held in Hangzhou in 2016, Indonesia responded positively to the theme Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy proposed by China. In the 2022 Bali summit, China firmly endorsed the three main priorities laid out by Indonesian presidency — namely global health architecture, digital-based economic transformation and energy transition.

As the transformation of the global economic landscape accelerates, China and Indonesia ought to enhance their strategic coordination, extend bilateral cooperation to more areas, push South-South cooperation, and jointly seek a greater say of developing countries in the global arena.

First, to consolidate the foundation for strategic cooperation. A major problem in China-Indonesia cooperation lies in the lack of communication over strategies and policies. Only by establishing high-level strategic mutual trust can the two countries effectively withstand external impacts and deepen cooperation in regional and global governance. The two countries should strengthen their strategic alignment and enhance their high-level exchanges and interactions to increase political mutual trust, and prevent geopolitical factors from disturbing their partnership.

Second, to highlight key issues in global agenda and increase cooperation in global financial governance and infrastructure building. China's investment in Indonesia is limited in scale, and thus there is huge potential for the growth of two-way investment. In infrastructure construction, China should enlarge investment in Indonesia in key areas such as ports, railways and electricity, and integrate infrastructure programs with industrial development and social governance to inspire more projects of infrastructure connectivity in the region. On top of that, the two countries should safeguard marine trade and energy transport passages, and provide more public goods for countries in the region and the world.

Third, to focus on regional coordination and push for higher-level cooperation in regional economic governance. Currently, it is imperative for major countries such as China and Indonesia to steer the direction of and provide more impetus for regional economic integration. Facing the surging anti-globalization sentiment and protectionism as well as the rising risk of economic decoupling and supply chains being severed, China and Indonesia should promote trade and investment facilitation, and build an open regional economic cooperation system at a higher level to create a stable growth engine in the Asia-Pacific region and further contribute to the rise of East Asia as well as the transformation of the global economic landscape.

Fourth, to enhance coordination on reform of the global economic governance architecture. The two countries should play bigger roles in preserving an open and inclusive global economy, and make larger contributions to countering the trend of anti-globalization and forging cooperation frameworks at a higher level. They should also play key roles in reforming the global economic governance system to better protect the rights and interests of developing nations, and increase the say of the Global South in international affairs. Also, China and Indonesia have large potential in maintaining the core status of the G20 in global affairs and improving the cooperation efficiency in global economic governance.

A decade after establishing a comprehensive strategic partnership, China and Indonesia face new opportunities for cooperation in global economic governance, and they are expected to make more contributions to stabilizing the regional and global economic development. It is hoped that the world will witness more Asia's moments in global governance.

The author is a researcher at the Center for Middle Eastern Studies at Fudan University in Shanghai. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.