Navigating Sinophobia amid Indonesia's economic ascent
Navigating Sinophobia amid Indonesia's economic ascent
WRITTEN BY DR NARAYANI SRITHARAN AND PETER RIZKILLAH
5 April 2024
In the intricate dance of global geopolitics, economic interests often intertwine with security concerns, nowhere more evident than in the case of Indonesia's relationship with China and the Belt and Road Initiative (BRI). As Chinese lending and infrastructure projects expand their footprint in the Indo-Pacific region so too do tensions and anxieties, giving rise to Sinophobia — the fear or dislike of China, its people, or its culture. This sentiment, rooted in historical grievances and contemporary fears, warrants careful analysis in the broader context of the BRI and Chinese strategic initiatives.
China's BRI has emerged as a powerful force reshaping the economic landscape of the Global South. While Western institutions like the Partnership for Global Infrastructure and Investment (PGII) strive to offer alternatives, Chinese lending practices often present irresistible opportunities for cash-strapped nations. US Secretary of the Treasury Janet Yellen's warnings about the sustainability of Chinese lending underscores the complexities developing countries face in balancing economic growth with debt sustainability.
Chinese lending is not merely about economic development but a strategic tool intertwined with notions of security and influence. AidData's dataset reveals a pattern of Chinese loans gravitating towards nations with elevated fiduciary risks, hinting at a deliberate strategy to court countries less concerned with democratic principles. Xi Jinping's emphasis on a "Global Civilisation Initiative" underscores the nexus between security and development. Concurrently, Chinese scholars increasingly frame counterterrorism and anti-piracy measures as integral to the Global Security Initiative (GSI), further melding economic engagement with security objectives. In this light, economic initiatives like the BRI are not just development tools but instruments of China's broader strategic goals, blending economic prowess with political and security ambitions.
Unraveling Sinophobia amid BRI expansion in Indonesia
Indonesia's embrace of the BRI under President Jokowi's leadership reflects a desire for rapid modernisation and infrastructure development. However, the influx of Chinese investments has stirred deep-seated anxieties, exacerbated by incidents of violence and perceived unfair practices. This violence often manifests in two primary forms: protests against Chinese workers and clashes at construction sites involving local communities.
Sinophobia in Indonesia is not merely a by-product of the BRI but a consequence of economic ambition intersecting with security concerns in a rapidly changing geopolitical landscape.
There are several documented incidents of violence and protest in Indonesia related to the influx of Chinese workers, particularly under the BRI. In March 2020, Indonesian students in Sulawesi protested against the arrival of Chinese workers, which sparked fears of job losses for locals, especially during the COVID-19 pandemic, and concerns over the lack of proper legal procedures for foreign worker employment. The students also wrote to the Chinese ambassador in Jakarta, demanding a halt to the entry of Chinese workers and the deportation of those already present.
In January 2023, clashes erupted at the PT Gunbuster Nickel Industry (GNI), a nickel processing plant owned and operated by China’s Jiangsu Delong Nickel Industry in Morowali, Central Sulawesi, involving groups of Indonesian and Chinese workers. Precipitated by unmet worker demands regarding safety procedures and wage issues, which escalated into physical altercations using factory equipment, the conflict resulted in the death of two individuals, one Indonesian and one Chinese. In December 2020, protests at PT Virtue Dragon Nickel Industry (VDNI) in Southeast Sulawesi turned violent when workers set parts of the plant ablaze. The protests were sparked by the company's refusal to meet worker demands for permanent employment status and pay raises, in line with Indonesian labour regulations.
These incidents raise questions about Chinese companies’ management practices in dealing with labour disputes, adherence to environmental sustainability, and compliance with Indonesia's regulatory framework. Given the labour unions' complaints about inadequate safety rules and oversight in sectors like mining, this indicates that the practices of some Chinese firms may not align with Indonesian regulations or expectations. For instance, the launch of a USD 2.7 billion ferronickel smelter with Chinese investment in Central Sulawesi has brought to the fore the scale of Chinese industrial activities under scrutiny. As outlined in the Indonesia Country Climate and Development Report, Indonesia's commitment to climate adaptation and mitigation presents an environmental and regulatory challenge, potentially at odds with the operations of foreign companies. Furthermore, the stringent data protection laws in Indonesia that govern personal data processing activities add another layer of complexity for these companies' compliance.
The presence of a large number of Chinese workers on tourist visas to perform even menial jobs, facilitated by lax visa policies and labour practices, has fuelled resentment and heightened fears of cultural and economic domination. According to a poll conducted by ISEAS Yusof Ishak Institute in 2022, 65 per cent of the participants believed the Chinese minority overshadows Indonesian enterprises in the economy, and 50.8 per cent of respondents felt secluded from the political realm.
The visa-waiver policy in Indonesia, originally designed to bolster economic ties and encourage tourism, has recently been extended to include Chinese workers, allowing them a capped 30-day travel without a traditional visa. This policy is part of Indonesia’s broader strategy to attract foreign investment and expertise, especially in sectors with a perceived shortage of local skills or labour. The misuse of visa-free routes intended for tourists has been a significant point of contention between Indonesian labour unions and Chinese companies. The announcement of the visa-waiver policy was followed by more Sinophobia. In North Sumatra, local communities expressed frustration over broken promises by Chinese companies. For instance, in the Dairi regency, after the sale of land to a Chinese-backed mining company, promises of employment for local residents were not fulfilled, contributing to a growing dissatisfaction with Chinese investments under the BRI.
Concerns regarding Sinophobia in Indonesia extend beyond economic factors and also touch upon the broader context of regional security. While there is no direct evidence of Islamist extremist groups like Jamah Ansharut Daulah (JAD) targeting Chinese nationals or businesses in Indonesia, the rise of such groups is a matter of concern for both nations, each for its own reasons. China, as a major global player, is invested in the region’s stability, which affects its investments and citizens abroad. Indonesia, grappling with internal security threats, is keen on maintaining public order and international confidence. The 2015 agreement between China and Indonesia to strengthen counterterrorism cooperation is a testament to their mutual interest in securing the region against the backdrop of such threats.
Towards a balanced approach in Indonesia-China relations
Sinophobia in Indonesia is not merely a by-product of the BRI but a consequence of economic ambition intersecting with security concerns in a rapidly changing geopolitical landscape. Indonesia’s case reveals a dichotomy: while the BRI presents opportunities for economic advancement, it simultaneously fuels the flames of societal apprehension and mistrust. This tension, driven by incidents at the PT Gunbuster Nickel Industry and other Chinese-operated ventures, symbolizes the broader struggles of emerging economies navigating the waters of international investment and labour dynamics. Addressing these complexities requires a multifaceted approach.
First, the Indonesian government must reassess its policies related to foreign investments and labour practices, ensuring they align with national interests and the well-being of its citizens. This reassessment should aim to create a more equitable environment where the benefits of foreign investments, such as job creation and infrastructure development, are more evenly distributed among the Indonesian populace.
Furthermore, it is imperative for China, as a responsible global player, to recognise and adapt to the local contexts of its BRI projects. Chinese firms must adhere to the labour laws and cultural sensitivities of host countries, fostering a sense of collaboration rather than dominance. Doing so could significantly reduce the friction caused by unfair practices and perceived cultural insensitivity.
On the international level, government and global institutions should facilitate dialogues to bridge understanding and foster cooperation. Forums and summits focusing on sustainable investment practices, fair labour laws, and cultural exchanges can provide platforms for countries to share best practices and find common ground.
Lastly, media outlets and civil society organisations have a crucial role to play in educating and informing the public about the nuances of these international dynamics. By providing balanced and factual reporting, they can demystify the complexities surrounding foreign investments and dispel unwarranted fears, contributing to a more informed and engaged citizenry.
Addressing the root causes of Sinophobia in Indonesia requires concerted efforts from multiple stakeholders. It is only through empathy, understanding, and cooperative engagement that sustainable solutions can be found, ensuring that the promises of economic growth and modernisation do not come at the cost of social harmony and national identity.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biographies
Narayani Sritharan is a Postdoctoral Fellow at the Global Research Institute at William & Mary in the AidData lab, a Templeton Fellow at the Foreign Policy Research Institute, and a Co-Founder and Steering Committee Member of Diversifying and Decolonising Economics.
Peter Rizkallah is a Research Assistant at the Global Research Institute at William & Mary. He researches Indo-Pacific security, disinformation, counterterrorism operations, guestworker programs, and the Belt and Road Initiative. Image credit: Flickr/International Labour Organization ILO.