Today the relations between Indonesia and China is strengthened by an agreement on diplomatic relations. First, it was signed on 13 April 1950 and ended on 30 October 1967. The Indonesian Government has suspended diplomatic relations between the countries after many individuals and some military leaders became victims of movement which was assumed to be associated with the communist government in China. The relationship between the countries had been cooled off for about 23 years.
Second, the relationship between the countries was reassumed on 8 August 1990 and the relationship has been well re-developed. The memorandum of normalization of the diplomatic relations between the countries specified the provision that Indonesia is allowed to develop non-governmental economic and trade relations with Taiwan. Since then, the relations between the two countries continued to grow fairly intense and increasingly strengthened, both in economy, trade, and investment. The establishment of Joint Commission between the countries has not only marked the bilateral relationships but also embraced the three pillars of cooperation, namely political and security, economic, and social cultural (people-to-people contacts), to strengthen the prospect of such cooperation.
The recent invitation extended by the Chinese Government on 5 – 10 December 2016 was meant to increase Indonesia’s Senior Diplomat’s knowledge on China’s development and policies in bringing its economy to its current stage. The opportunity to have site visits also enabled to gain first-hand knowledge of China’s economic policies on trade such as Shanghai free trade zone and innovation such as the Waigaoqiao #3 power plant, and a presentation by the Director of China Railways during the journey to Shanghai by the bullet train. Indeed, the visit was well arranged to have a clear and comprehensive picture of why China is what it is today.
China’s economy is in historic transition. Opportunities and challenges are varied. Currently, China’s problems are daunting, from issue of slower growth, social imbalances, industrial overcapacity, excessive debt, massive pollution, and many other challenges and opportunities. In this context, lesson-learned are taken during the visit is how China’s able to address such diverse, complex issues? And, the key of success is because China has an overarching, guiding strategy so-called the “Five Major Development Concepts”. This model of China’s development to move forward will be driven by “innovation, coordination, green, openness and sharing”. My next curiosity is why these five concepts? How does each work? Why this order? Why now this guiding, integrated strategy? Would that be possible if Indonesia can through follow such guiding principles?
Throughout series of presentations during the visit, neither in Beijing nor in Shanghai, I was so pleased to find out that “Innovative Development” in the top spot, the first of the five development concepts. It signals that China’s appreciate the primary role of reform in the country’s economic and social transformation. Reform requires change, change requires doing things differently, and doing things differently requires innovation. I looked for two kinds of innovation, namely science and technology.
Why is the second development concept “Coordinated Development”? I believed that in order to optimize economic development, the efficient allocation of resources is essential. While China now recognizes that the market must play a “decisive” role, still there are issues, such as when provinces and cities compete with each other by developing similar industries. Other issues requiring coordination include how to integrate diverse regions and rebalance urban and rural areas.
The third development concept is green. Polution has become a scourge in China, the debilitating consequences of rapid industrial development. Chinese people are exceedingly displeased to see their air, water and soil so polluted, and the government has responded by elevating “Green Development”, the third development concept, to highest national importance.
The fourth development concept “Open Development” is exemplified by China’s free trade zones, the Belt and Road Initiative, and Chinese companies going abroad (building infrastructure, selling high-speed rail, even buying foreign companies). The development and improvement of Shanghai’s city and China’s high speed railways (Beijing – Shanghai) were among the symbol of modernization and human civilization which reflects China’s comprehensive power as an advance country. Sooner or later, China is developing to be the next power house of the region and global major player.
Why “Shared Development” to be the fifth development concept is so vital. In my view, shared development comes last, not because it is least important, but because it requires the success of the first to four development concepts. China cannot become a “moderately prosperous society” until its economic and social imbalances between rural and urban areas are reduced and poverty is eliminated.
Why now these guiding principles are an integrated strategy? For China to fulfill its first comprehensive goal of becoming a “moderately prosperous society” by 2020, its economy must transition and its society must re-balance and to bring about such major transformations; therefore, the Five Major Development Concepts are crucial for China. Having said that I am of the view that there are two levels of issues that Indonesia should consider from above-mentioned guiding principle to be taken.
First, Indonesia should develop further technical cooperation in the field of science and technology. Innovation is the primary role of reform in the country’s economic and social transformation. Reform in Indonesia requires change, change requires doing things differently, and doing things differently requires innovation.
Second, Indonesia should develop further trade and investment cooperation with a cautious condition that the increased trade and investment of China and the increasing number of Chinese workers/technicians in Indonesia not to take over the employment of Indonesian workers/technicians. The “Open Development” is exemplified by China’s free trade zones, the Belt and Road Initiative, and Chinese companies going abroad (building infrastructure, selling high-speed rail, even buying foreign companies) are among those to be highly considered to support Indonesia’s initiative improving its infrastructures.
Taking into account the above options, it is suggested that Indonesia should consider implementing or follow through the above-mentioned “Five Major Development Concepts”, with consideration that the second option should remain to be prioritized. Indonesia-China relations would then have to be reviewed cautiously in the context of a bilateral framework in order to leave a room for Indonesia to be more flexible for other untapped potentials, particularly innovation on China’s science and technology.