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Asia Times
6 hours ago
- Business
- Asia Times
Red flags rising over China's trade surplus with Indonesia
Indonesia's widening trade deficit with China has evolved into more than an economic concern—it now poses the risk of becoming a destabilizing fissure within the country's social fabric and, by extension, ASEAN's regional stability. According to Indonesia's Central Statistics Agency (BPS), between January and April 2025, Chinese imports to Indonesia surged to US$25.8 billion, while Indonesian exports to China stagnated at $18.9 billion. The resulting $6.9 billion deficit, the highest recorded in recent history for such a short period, raises already rising concerns about asymmetry in the bilateral trade relationship. Although Indonesian authorities have attempted to downplay its significance by dismissing suggestions that this is due to the redirection of Chinese exports blocked by US and EU tariffs, the underlying realities paint a different picture. The sectors most affected by Chinese imports —namely, mechanical and electrical machinery, steel, automotive parts, and ceramics —are precisely those where China has long faced overcapacity. With Western markets erecting expanding barriers on Chinese goods in response to perceived unfair trade practices, Southeast Asia, particularly Indonesia, has become a convenient outlet for China's surplus industrial products. In effect, Chinese goods that cannot be sold in the US and EU are being channeled into the Indonesian market, either directly or via re-routing strategies through third countries. This dynamic mirrors the 2018–2020 period of the US-China trade war, when Southeast Asia similarly absorbed a disproportionate amount of redirected Chinese exports. Indonesia's manufacturing base has already begun to show signs of strain from the flood of cut-rate Chinese wares. The once-thriving textile sector, exemplified by the now-defunct Sritex conglomerate in Solo, has been unable to keep up with the price competition from cheap Chinese imports. Small and medium-sized manufacturers in ceramics and steel are also increasingly being squeezed by Made in China goods. Though the Indonesian government has responded by levying anti-dumping duties on select products, such as nylon film from China, Thailand and Taiwan, these actions have largely been reactive and insufficient to counteract the scale and pace of Chinese trade redirection. The longer this continues, the more it will undermine local industry, employment and economic self-sufficiency. The economic repercussions are only one layer of the problem. What makes this fissure particularly dangerous is its potential to metastasize into social tension. Indonesia's multi-ethnic composition includes a sizable Chinese-Indonesian minority that has historically been subject to scapegoating during economic downturns. The riots of May 1998, which led to the collapse of the Suharto regime, serve as a chilling reminder of how quickly economic grievances can morph into ethnic-based violence against ethnic Chinese. In the current climate of economic pressure and increasing unemployment—especially among urban manufacturing workers—there is a real risk that the narrative of Chinese imports 'destroying local industry' could morph into resentment directed at Chinese-Indonesian entrepreneurs, many of whom operate in retail, logistics and trade. In an age where social media can amplify divisive messaging in real-time, the potential for misinformation and targeted ethnic vilification should not be underestimated. At the regional level, Indonesia's predicament reflects a broader structural challenge in ASEAN. Countries like Malaysia, Thailand and Vietnam have also experienced spikes in Chinese imports, particularly in sectors like automobiles and electronics. The nature of these imports—often heavily subsidized and arriving in large quantities at prices below prevailing market rates—suggests deliberate Chinese dumping. Yet ASEAN's current mechanisms are ill-equipped to deal with these surges in a coordinated manner. Each country acts on its own, imposing unilateral anti-dumping tariffs or seeking redress through domestic trade tribunals, thereby diminishing the strength of a collective ASEAN-wide economic position. What is needed is not isolationism but a recalibration of engagement. Indonesia and ASEAN must articulate clearer expectations in their trade relationships with China. Fairness, reciprocity and respect for domestic industries must be at the heart of any economic partnership. The notion that Southeast Asia should serve as China's release valve for overproduction is not only economically detrimental but geopolitically short-sighted. It risks turning ASEAN from a central strategic partner into a passive buffer zone—absorbing external shocks without the tools to respond effectively. Equally important is ASEAN's need to revive its own internal trade capacities. The ASEAN Economic Community was envisioned to deepen intra-regional trade and investment, yet the share of intra-ASEAN trade has remained stagnant at around 22–24% over the past decade. This is far below the intra-regional trade levels of the EU, which stands at around 60%. Reducing non-tariff barriers, streamlining customs procedures and improving regional logistics are all urgent if ASEAN is to build internal economic resilience. Greater economic interdependence within ASEAN would not only mitigate vulnerability to external dumping but also foster shared growth that benefits smaller economies equally. For Indonesia, the road ahead demands bold policy interventions. The country must begin by strengthening its industrial strategy—reinvesting in productivity, technological upgrading and workforce development—so that its manufacturing sectors are not merely shielded but revitalized. Trade defense instruments must be improved, not only in terms of speed and scope but also in coordination with ASEAN partners. The government should also launch public education campaigns that preempt the ethnicization of economic issues. The messaging must be clear: this is not a conflict between ethnic groups but a structural issue in global trade dynamics that requires unity, not division. China, for its part, must recognize that sustaining goodwill in Southeast Asia cannot rely solely on infrastructure investment or diplomatic fanfare. It must pay heed to the social consequences of its trade behaviors. Dumping excess production into Indonesia and other ASEAN markets may offer short-term economic relief for Chinese exporters, but it risks breeding long-term resentment, social instability and strategic blowback in a region vital to China's Belt and Road Initiative ambitions. The growing trade imbalance between Indonesia and China is not yet a fracture—but it is undeniably a fissure, one that reveals the fragile interconnections between economic policy, social harmony and geopolitical alignment. Whether this fissure is widened or closed depends on the wisdom and coordination of both Indonesia's domestic leadership and ASEAN's collective diplomacy. To ignore it would be to misread not only the fragility of Indonesia's pluralistic society but also the limits of ASEAN's absorptive capacity. By addressing this issue with fairness, clarity and resolve, Indonesia can lead the region in forging a more balanced relationship with China—one that respects economic sovereignty, sustains regional stability and ultimately preserves the dignity of Southeast Asia's diverse peoples. Phar Kim Beng, PhD, is professor of ASEAN Studies, International Islamic University Malaysia and senior visiting fellow at the University of Cambridge. Luthfy Hamzah is senior research fellow of ASEAN Studies at Strategic Pan Indo Pacific Arena.
CNA
23-05-2025
- Politics
- CNA
Fiercest outcry yet of Prabowo placing uniformed men in civilian posts, as convicted army general becomes customs chief
JAKARTA: An active military general previously convicted of kidnapping pro-democracy activists was appointed on Friday (May 23) to a key role in Indonesia's Finance Ministry, sparking what observers say is the fiercest criticism yet of President Prabowo Subianto's moves to place senior uniformed personnel in top civilian roles. The swearing-in of Lieutenant General Djaka Budhi Utama as director-general of Indonesia's customs and excise office also heightens fears of a return to the days of Suharto's rule, when the military had far-reaching control over civilian life, the experts also say. Previously a senior official at the State Intelligence Agency, the 57-year-old Djaka joins a growing list of active military or police officers given strategic government roles since Prabowo – himself a retired general – took office last October. That same month, the president appointed Lieutenant Colonel Teddy Indra Wijaya as cabinet secretary, a minister-level position. Teddy was Prabowo's aide during his time as defence minister from 2019 to 2024. At least six active military officials have since been appointed to various roles in ministries, agencies and state-owned enterprises. On Monday, an active police officer, Inspector General Mohammad Iqbal, was appointed secretary-general of the Regional Representatives Council (DPD), one of two parliamentary chambers of Indonesia. Their appointments have incited worry that Indonesia is returning to the days of the authoritarian rule of Suharto, who governed from 1968 until 1998. The Suharto era saw the military in control of nearly every aspect of civilian life until a student movement forced him to resign on May 21, 1998. Suharto was also Prabowo's father-in-law. Djaka's appointment, however, has sparked greater concern among activists and experts because of his previous conviction and the technical role he has been given. His is also one of the most senior roles handed to an active military officer under Prabowo's watch. DJAKA HAS RESIGNED FROM MILITARY, SAYS MINISTER In 1999, Djaka and 10 other members of the special forces' 'Rose Team' were found guilty by a military tribunal for the 1997-1998 kidnapping of 22 pro-democracy activists who were critical of then-president Suharto. To this day, 13 of these activists are still missing. Djaka, then an infantry captain, was sentenced to 16 months in prison for his role in the kidnappings. Despite this, he got to keep his job in the military. The other defendants were sentenced to 16 to 22 months in prison. 'Victims and their families have been fighting for justice for decades. How can victims get the justice they deserve when perpetrators are given strategic government positions?' Ardi Manto Adiputra, director of human rights advocacy group Imparsial, told CNA. Prabowo, too, is accused of being involved in a number of human rights abuse cases, including the kidnappings. Although he never faced any charges, Prabowo was discharged from the military shortly after Suharto fell from power in 1998. Djaka was Prabowo's subordinate when the latter led the Army's special forces command in the 1990s, which also sparked concerns among experts that the president is less interested in installing the best man for the job and more about rewarding loyalists with strategic posts. To be sure, Prabowo's predecessors have also allowed active soldiers to take up civilian posts. But they have usually been limited to roles involving security, law enforcement, intelligence and disaster mitigation. Since its founding in 1972, chiefs of the National Search and Rescue Agency (Basarnas) have been active generals. Meanwhile the National Disaster Mitigation Agency (BNPB), which was founded in 2008, has been helmed by active generals since 2019. In March, Indonesia's parliament, which is controlled by Prabowo's coalition of parties, passed a revision to the law on the military, formally allowing active military officers to assume roles in 14 government ministries and agencies without first resigning. The revision sparked widespread demonstrations across Indonesia, some of which ended in violent standoffs between protesters and security officials. But the finance ministry is not among the 14 public offices allowed under the new law, and experts said Djaka must resign from active duty in the military. According to Coordinating Minister for Economic Affairs Airlangga Hartarto, who was quoted by Antara news agency on Friday, Djaka submitted his resignation before he was sworn in. The Indonesian armed forces have not responded to CNA's request for confirmation regarding Djaka's status in the military. 'ARE THERE NO CIVILIANS MORE QUALIFIED?' The other area of controversy is the opaqueness of Djaka's appointment and whether there was no technocrat better suited for the role. 'Why (Djaka)? Why appoint a general? Are there no civilians who are more qualified? Was Djaka appointed simply because of his closeness to Prabowo?' questioned Al Araf, chairman of security and human rights research group Centra Initiative. News that Djaka was set to be the new customs director came on Tuesday when he was summoned to meet Prabowo at the State Palace in Jakarta. Also summoned was Bimo Wijayanto, a civilian bureaucrat who was also sworn in on Friday as the new director-general of the finance ministry's taxation office. According to Detik news portal, Bimo later told reporters that he and Djaka met the president as they were to assume 'new roles at the finance ministry'. Djaka declined to speak to the media. Finance Minister Sri Mulyani Indrawati said on Friday that Prabowo wanted to see the pair because their roles are vital to bringing in state revenue. 'Djaka's presence provides an added value which we hope can support and enhance the Finance Ministry's ability to coordinate with law enforcers and other institutions better and more effectively,' Sri Mulyani said of the three star general's military background. But questions persist over whether he is qualified for the role. 'It is true that there are problems like corruption and the smuggling of illegal goods which requires someone with an iron fist,' said Bhima Yudhistira, executive director of the think-tank Center of Economic and Law Studies (Celios). 'But being a customs chief also requires sufficient knowledge of the economy so they can formulate the right policy and strategy to increase state revenue without burdening businesses and consumers too much,' Bhima told CNA. 'The appointment of a military man with little economic experience sends the wrong message to businesses and investors. They need competent people to helm strategic economic roles so they know that Indonesia's economy is in the right hands.' In recent months, Prabowo's policies, such as backtracking on a planned value-added tax hike that would have boosted government revenue, have rattled investors. Meanwhile, Djaka's appointment suggests the Prabowo administration will not restrict the presence of military or police personnel to the 14 ministries and agencies allowed by law, analysts said. 'The Prabowo administration keeps on saying that it is not militarising the government, that the military will only have additional roles in 14 ministries and agencies,' Human Rights Watch's Indonesian researcher Andreas Harsono said. 'It says a lot about not only the intention of President Prabowo to revive the Suharto period with many active military officers in civilian roles,' Andreas added. 'It also exposes cynicism that Prabowo could make someone with a checkered past like Djaka to head the customs office.'
South China Morning Post
22-05-2025
- Politics
- South China Morning Post
‘Resist forgetting,' say Chinese-Indonesians still seeking justice for mass rapes in 1998 riots
Calls are growing for the Indonesian government to formally acknowledge the mass rapes of the country's ethnic Chinese women during the May 1998 riots, as members of the minority community commemorate the tragedy with a vow to 'resist forgetting' even as justice remains elusive. Advertisement The unrest that swept Indonesia 27 years ago was triggered by soaring food prices, economic collapse and mounting public anger at then president Suharto's authoritarian rule. He stepped down on May 21, 1998, after weeks of student-led protests – but in the days before his resignation, Jakarta and other cities were engulfed by deadly riots targeting Chinese-Indonesians. Mobs looted and burned Chinese-owned shops and homes, and numerous cases of sexual violence were reported. According to the Volunteer Team for Humanity, 130 rapes of Chinese-Indonesian women in Jakarta were documented between May 13 and 15 alone. The group reported the figure in July 1998 – but no perpetrators have ever been brought to justice. The events remain a deep scar for Chinese-Indonesians. Eyewitness accounts gathered by the government's Joint Fact-Finding Team at the time suggested the anti-Chinese violence was orchestrated by provocateurs linked to the military. One of the most chilling episodes came months later. Ita Martadinata Haryono, a Chinese-Indonesian member of the Volunteer Team for Humanity, was found murdered in her bedroom in October 1998. Her killing occurred just days before she was due to testify before the US Congress about the sexual assaults and killings. The group claimed her death was an attempt to silence activists. Advertisement Today, the lack of justice still weighs heavily on survivors and their communities.
Malay Mail
19-05-2025
- Politics
- Malay Mail
Indonesia's new history books raise fears of whitewashing Suharto, Prabowo pasts
JAKARTA, May 19 — The Indonesian government's plan to release new history books has sparked concerns that some of the country's darkest chapters could be recast to show President Prabowo Subianto and late authoritarian ruler Suharto in a favourable light. The 10-volume series would have an Indonesia-centric narrative and aims 'to reinvent the Indonesian identity,' Culture Minister Fadli Zon told Reuters in an interview. Several historians said the commissioning of the books presents an opportunity for historical revisionism at a time when Indonesia's younger generations — largely responsible for Prabowo's resounding election victory last year — have little or no memory of Suharto's 1966-1998 New Order era. Prabowo openly praises Suharto, who was once his father-in-law, and is increasingly turning to the military to carry out his government's vision. Prabowo has also been accused of rights abuses while in the military, including involvement in the kidnapping of student activists during riots in 1998 — allegations he has repeatedly denied and which Fadli said had been debunked. Asvi Warman Adam, a leading historian who used to work at the National Research and Innovation Agency, said he was calling on academics to lobby lawmakers to scrutinise what he said would be 'propaganda'. 'I suspect there is an intention to legitimise the ruling regime... such as by excluding gross human rights violations in 1998 linked to Prabowo,' he said, adding that he expected the government would soon confer the posthumous title of 'National Hero' on Suharto. Asked about concerns by some analysts and historians that the books could be used as propaganda, be politicised and omit human rights abuses that have been linked to Prabowo and Suharto, Fadli said: 'History will be written correctly'. The president's office did not immediately respond to a request for comment on the new books. Prabowo has previously said that former activists were his supporters. Fadli, who has authored a book that defended Prabowo's actions as a special forces commander during Suharto's 32-year rule, added that neither he nor Prabowo would be involved in the editorial process. The books, which Fadli said were commissioned last year, will chronicle the history of humankind in Indonesia from homo erectus to Dutch colonisation to Prabowo's election. They will be authored and edited by about 100 historians and Fadli says he wants them ready by August 17, Indonesia's Independence Day. Mass killings in focus Made Supriatma, a visiting fellow at the ISEAS-Yusof Ishak Institute in Singapore, said he believes the government will use the same playbook as Suharto, who released a six-volume book series in 1975 titled 'The National History of Indonesia' that he said glorified the military and was fraught with inaccuracies. 'Prabowo's history within this republic is not good, to be frank... Do they dare to write that?' said Made. Jajat Burhanuddin, a historian involved in the project, said so far there has been no state intervention. The 1998 kidnappings and torture of student activists would be included, he said, although he declined to say whether Prabowo would be mentioned in those accounts. Another key focus for historians will be how the books portray the mass killings of communists and sympathisers in 1965 and 1966, led by military and Islamic leaders. Some historians estimate more than half a million people were killed. No investigation has been conducted into the killings, which were in response to the murder of generals by the communist party in an abortive coup. Suharto rose to power in the aftermath and remained president until 1998, when he stepped down during a popular uprising and economic crisis after allegations of corruption and nepotism. The 1965 events continue to be debated in Indonesia. Fadli said the new books would not take a deeper look into the massacres. Fadli, who was among the student activists who demonstrated against Suharto, now speaks highly of the former ruler, highlighting economic achievements in his early presidency, including slashing poverty and tackling inflation. 'My opinion has always been for a long time that Suharto should be considered a national hero,' he said. — Reuters
AsiaOne
19-05-2025
- Politics
- AsiaOne
In Indonesia, fears grow that dark past may be rewritten with government's new history books, Asia News
JAKARTA — The Indonesian government's plan to release new history books has sparked concerns that some of the country's darkest chapters could be recast to show President Prabowo Subianto and late authoritarian ruler Suharto in a favourable light. The 10-volume series would have an Indonesia-centric narrative and aims "to reinvent the Indonesian identity," Culture Minister Fadli Zon told Reuters in an interview. Several historians said the commissioning of the books presents an opportunity for historical revisionism at a time when Indonesia's younger generations — largely responsible for Prabowo's resounding election victory last year — have little or no memory of Suharto's 1966-1998 New Order era. Prabowo openly praises Suharto, who was once his father-in-law, and is increasingly turning to the military to carry out his government's vision. Prabowo has also been accused of rights abuses while in the military, including involvement in the kidnapping of student activists during riots in 1998 — allegations he has repeatedly denied and which Fadli said had been debunked. Asvi Warman Adam, a leading historian who used to work at the National Research and Innovation Agency, said he was calling on academics to lobby lawmakers to scrutinise what he said would be "propaganda". "I suspect there is an intention to legitimise the ruling regime... such as by excluding gross human rights violations in 1998 linked to Prabowo," he said, adding that he expected the government would soon confer the posthumous title of National Hero on Suharto. Asked about concerns by some analysts and historians that the books could be used as propaganda, be politicised and omit human rights abuses that have been linked to Prabowo and Suharto, Fadli said: "History will be written correctly". The president's office did not immediately respond to a request for comment on the new books. Prabowo has previously said that former activists were his supporters. Fadli, who has authored a book that defended Prabowo's actions as a special forces commander during Suharto's 32-year rule, added that neither he nor Prabowo would be involved in the editorial process. The books, which Fadli said were commissioned last year, will chronicle the history of humankind in Indonesia from homo erectus to Dutch colonisation to Prabowo's election. They will be authored and edited by about 100 historians and Fadli says he wants them ready by Aug 17, Indonesia's Independence Day. Mass killings in focus Made Supriatma, a visiting fellow at the ISEAS-Yusof Ishak Institute in Singapore, said he believes the government will use the same playbook as Suharto, who released a six-volume book series in 1975 titled The National History of Indonesia that he said glorified the military and was fraught with inaccuracies. "Prabowo's history within this republic is not good, to be frank... Do they dare to write that?" said Made. Jajat Burhanuddin, a historian involved in the project, said so far there has been no state intervention. The 1998 kidnappings and torture of student activists would be included, he said, although he declined to say whether Prabowo would be mentioned in those accounts. Another key focus for historians will be how the books portray the mass killings of communists and sympathisers in 1965 and 1966, led by military and Islamic leaders. Some historians estimate more than half a million people were killed. No investigation has been conducted into the killings, which were in response to the murder of generals by the communist party in an abortive coup. Suharto rose to power in the aftermath and remained president until 1998, when he stepped down during a popular uprising and economic crisis after allegations of corruption and nepotism. The 1965 events continue to be debated in Indonesia. Fadli said the new books would not take a deeper look into the massacres. Fadli, who was among the student activists who demonstrated against Suharto, now speaks highly of the former ruler, highlighting economic achievements in his early presidency, including slashing poverty and tackling inflation. "My opinion has always been for a long time that Suharto should be considered a national hero," he said. [[nid:717469]]
