Asian Angle | Why Indonesia’s the winner of the next China-Japan economic battle
- Jakarta is in the middle of a tug of war between Beijing and Tokyo for economic influence
- As recent investment figures make clear, that’s an enviable place to be
According to the proverb, when elephants fight it is the grass that suffers. Well, so much for that proverb. The case of Indonesia shows that being the rope in a tug of war between two economic giants – in its case China and Japan – can be a very lucrative position indeed.
First, consider the seemingly ever closer friendship between Jakarta and Beijing. Whether it is in education and media or investment and infrastructure, there’s little doubt that ties are at something of a high point.
Second, consider the strengthening relationship between Jakarta and Tokyo. Japanese investment in Indonesia, which experienced a downturn following the 1997 Asian Financial Crisis, has grown to the point that Japan is now one of most important investors in Indonesia.
In 2018, Japan invested US$4.9 billion in Indonesia, more than any other country after Singapore. Indonesia is also one of Japan’s biggest trading partners in the export-import sector.
