World leaders and the world waited to watch how the US and China would interact with each other at the APEC and G20 meetings in November and December 2018. The APEC meeting turned out to be frosty and cold between the world’s two largest economies, so much so that for the first time in the organization’s history, the meeting did not produce a joint communique at the end. The G20 meeting was more fruitful as China and the US agreed to a temporary trade truce, with sanctions withheld by the US for 90 days for China to address American concerns about trade, including the automobile and agricultural sectors.
The APEC meeting was extremely crucial for Beijing as it takes on the role of advocating free trade amongst the major world leaders. After Brexit and MAGA (Make America Great Again), China’s President Xi Jinping, France’s President Emmanuel Macron and German Chancellor Angela Merkel are the three world leaders of major economies left standing to defend free trade. China itself is a beneficiary of global free trade and is keen to protect all multilateral institutions in favor of global and regional free trade. APEC is still Asia Pacific’s largest supranational economic institution promoting free trade while the G20 has become increasingly more important as emerging and fast-developing large economies become increasingly influential in global economic affairs. Given this backdrop, it was no surprise that Xi became the first world leader to say yes to attending the APEC meeting — Papua New Guinea’s (PNG) event of the year — despite security and infrastructure concerns from other stakeholders.
While Sino-US interactions were the main event in both summits, other deals were going on in the other rooms of the two meetings.
The APEC meeting heralded the important role that Indonesia played behind the scenes. In November 2017, Indonesia provided crucial security training for PNG officials with the objective of hosting the 2018 APEC meeting smoothly. Indonesian experts transferred technical knowledge on maintaining airport security, simulation exercises, protocol processes and liaisons procedures. Indonesian security forces also trained PNG law enforcement authorities to operate handguns and other light weaponry to provide security for the world leaders attending the meeting. It was a strong show of commitment by Indonesia to PNG as well as to the APEC organization. The peaceful and secure outcome of the APEC meeting proved such training’s effectiveness.
Besides providing security training for PNG officials, Indonesia had another delicate task. Indonesia also shouldered global affairs responsibilities as President Joko Widodo tried to play a truce maker between China and the US. In doing so, he was trying to secure economic stability for the region and the world. While he did not succeed in this role, the international media picked up and highlighted his mediating role and reflected Indonesia’s newfound confidence in world affairs. Widodo had a successful round of meeting with the Chinese leadership. Xi proclaimed that both countries are developing and emerging economies with shared characteristics. China also pledged to import more products from Indonesia while securing Indonesia’s continued support for the Belt and Road Initiative (BRI).
In the contestation between the US and China, Southeast Asian countries are positioning themselves cautiously to bring peace, stability and economic development to the region and their own countries without the need to choose sides. None of them favor a bipolar Cold War-like situation.
In the economic sphere, Widodo declared Indonesia’s support for free trade in his speech at the 2016 Hangzhou G20 Meeting. He also appealed to reduce barriers for small and medium sized enterprises (SMEs) investing or operating in the G20 countries. In many G20 countries, SMEs typically make up the biggest employment numbers and are sources of innovation in those countries. Indonesia has therefore been speaking up for free trade since at least 2016 in the G20 forums. Symbolically, the 2018 APEC Meeting in Port Moresby between Widodo and Xi was a bilateral interaction between the world’s second largest economy and the globe’s largest Muslim country.
In the geopolitical sphere, China is supportive of Indonesia’s geopolitical vision as a maritime fulcrum in the region. Indonesia had been capturing illegal fishing trawlers that entered its maritime boundaries and ejected the crew of those boats before blowing up their empty boats to warn others from doing the same. Indonesia had also fortified its Natuna Islands in South China Sea and deployed Swiss Oerlikon-made Skyshield short-range surface to air missile system and radar/sensor system to defend its South China Sea assets. Operated by the Indonesian Air Force, the Skyshield can shoot down air-fired missiles, choppers, unmanned aerial vehicles, lower-flying fighter-bombers and combat warplanes.
Beijing’s support for Indonesia’s maritime fulcrum vision meant that it recognizes that both countries are major powers in the South China Sea region. After all, Indonesia straddles the South China Sea, the Sunda Straits and also the Straits of Malacca that leads to access to the Indian Ocean. The Straits of Malacca is one of the busiest sea lanes in the world and often the subject of great power rivalry since the days of the Portuguese maritime empire 400 years ago. Indonesia’s sprawling 13,000-island archipelago is of great importance to China’s global trade and shipping ambitions. Therefore, the Port Moresby discussion was important in harnessing Indonesia’s functional cooperation.
In the contestation between the US and China, Southeast Asian countries are positioning themselves cautiously to bring peace, stability and economic development to the region and their own countries without the need to choose sides. None of them favor a bipolar Cold War-like situation, as had happened in the past between the Soviet Union and the US-led capitalist/democratic Free World. As the biggest country in Southeast Asia, Indonesia has a special role as the first amongst equals in ASEAN to interact with big powers in the region. Indonesia is expected to advocate an ASEAN-centric view, whether in the Indo-Pacific strategy advocated by the US and Australia or the regional initiatives within the framework of ASEAN Plus One or the Maritime Silk Road leg of the BRI.
In the final analysis, the US still remains crucial and important to the region, as it is the biggest economy in the world with the most extensive security alliance network in the Asia Pacific region. Its so-called withdrawal from regional and global affairs is a premature conclusion. Many countries in the East Asian region continue to support free trade while finding ways of accommodating the Trump administration’s new economic priorities in addressing the US trade deficits. Some consider the US’s new thinking in trade under the Trump administration as a form of structural adjustment needed to address global imbalance in trade. However, one political element in the trade exchanges may need to be managed carefully. The US’ warning to economies taking on unrealistic high levels of debt from China may have to tackled carefully and frankly by the world’s two largest economies. It may also represent an opportunity for the two superpowers to reprioritize the recipient countries’ needs first.