Regional Power Bargains: How China and Indonesia Tap into Each Other's Influence in Southeast Asia through Mutual Bargains on Infrastructure Investments

Mr Emirza Syailendra1

1Australian National University, Australia

Biography:

Emirza Adi Syailendra is a PhD Candidate at the Strategic and Defence Studies Centre (SDSC), The Australian National University (ANU). He is also a Research Fellow and a Co-Investigator of a Strategic Policy Grant on Indonesia’s Maritime Strategy.

Abstract:

My presentation delves into the negotiation process between two regional powers in East Asia, China and Indonesia, as they navigate agreements to coexist, collaborate, and leverage each other’s regional influence over seventy years, from the establishment of their diplomatic relations in 1950 to 2024 (the end of Indonesian President Joko Widodo’s presidency). Since 1950, Beijing had worked to court Jakarta’s support to legitimize its regional role. However, Jakarta had been cautious due to the persistence of anti-China sentiment within the defense and elite circles. This reluctance shifted in 2013 as Jakarta began to see Chinese investment as essential to escaping the middle-income trap and recognized its potential as a global player, especially in the Electric Vehicle supply chain. Despite the convergence of interests, these two regional powers needed to manage their relationship carefully, thus engaging in a two-level bargaining process to harmonize their expectations of each other. The two-level bargaining framework comprises a constitutive bargain, which establishes the socio-normative structure of the relationship, and a regulative bargain, which outlines terms of interaction and exchange, including strategies for mitigating risks. How does this bargaining process inform us about the importance of support from smaller regional powers in legitimizing the hegemonic aspirations of a rising power?