By Stanley Widianto
JAKARTA, Aug 21 (Reuters) – China and Indonesia’s foreign and defence ministers will meet on Friday, with security, politics and economic issues set to dominate talks, as Jakarta tries to balance ties with both Beijing and Washington amid trade battles and tensions in the South China Sea.
China’s Foreign Minister Wang Yi, visiting Jakarta for the first time in two years, will meet his Indonesian counterpart Sugiono and participate in a “2+2” meeting with the two countries’ defence ministers.
The foreign ministers’ meeting will focus on economic issues as well as political relations, Arifianto Sofiyanto, an Indonesian foreign ministry official overseeing East Asia, told a press conference on Thursday.
Lin Jian, a Chinese foreign ministry spokesperson, said this week that the meetings will discuss “political and security issues, defence cooperation, and the international and regional situation.”
DISPUTED CLAIMS
Last week, Taiwan, which China claims as its own territory, was angered by a rare joint military exercise between the Chinese and Indonesian navies that took place east of Taiwan.
Indonesia’s navy said a vessel conducted routine exercises, not only with China, but also with Japan and the United States.
Defence analyst Curie Maharani said that while Indonesia saw the exercise as routine, the location enabled China to signal a different political message.
“Indonesia learned a valuable lesson about how great powers use defence diplomacy more as an instrument of influence projection,” she said.
Indonesia also has its own disagreements with China over the South China Sea, which Beijing claims almost in its entirety.
During President Prabowo Subianto’s visit to China in 2024, his first foreign trip after taking office, a maritime development deal signed by both countries said they had reached common understanding “on joint development in areas of overlapping claims.”
The wording was controversial, interpreted by analysts as a change in Jakarta’s long-held stance as a non-claimant state in the contested South China Sea. Indonesia responded by reiterating it does not recognise China’s claims.
“Indonesia does not wish to escalate the situation and prefers to engage China through defence diplomacy,” Curie said.
There has been a significant increase in engagement between the two countries in the past five years, though that still pales in comparison to Indonesia’s defence cooperation with the United States or Australia, she added.
Asked whether these issues will be discussed during this week’s talks, Arifianto said the agenda was still being finalised.
Prabowo has repeatedly said he maintains Indonesia’s “free and active” foreign policy of non-alignment, vowing to befriend all countries including China and the United States.
TRADE AND INVESTMENT
China is a major investor in Indonesia, contributing $3.9 billion of foreign direct investment in the first half of 2026, according to Indonesia’s investment ministry. But regulations around some of that investment have been a source of friction.
In May, Chinese companies operating in Indonesia urged the government to adopt more business-friendly policies, saying higher taxes and a new nickel pricing formula were driving up costs and threatening investment.
In a letter seen by Reuters, the China Chamber of Commerce in Indonesia said Chinese firms faced “excessively stringent regulation, over-enforcement”, and alleged corruption and extortion by authorities.
Key investors include the world’s biggest EV battery maker, Contemporary Amperex Technology Co, and steel maker Tsingshan Group, which have built smelters in Indonesia, which has the world’s largest nickel reserves.
Prabowo has said that many foreign investors have complained that Indonesia requires too many permits and approvals take too long, and has called for deregulation to support investment.
(Reporting by Stanley Widianto; Additional reporting by Ethan Wang; Editing by Josh Smith and Edwina Gibbs)
