Indonesia balances China ties with maritime resolve

Global Watch | 2026-05-28

Indonesia sits astride some of the world's busiest sea lanes, including maritime corridors increasingly shaped by Chinese patrols, seabed mapping and regional deterrence efforts, and holds roughly 42 percent of global nickel reserves, according to recent U.S. Geological Survey estimates.

Under President Prabowo Subianto, Jakarta is moving from a largely reactive posture to a more deliberate effort to shape its strategic environment while preserving its nonaligned tradition.

The shift matters because Indonesia's waters are critical to energy flows, shipping bound for China and broader Indo-Pacific trade.

Its nickel is also central to electric vehicle and battery supply chains, giving Jakarta new leverage while exposing it to market swings, environmental pressures and foreign dependence.

The International Energy Agency has warned that nickel supply is becoming more concentrated. The top three producing countries are projected to supply 85 percent of mined nickel by 2035, up from 75 percent in 2024.

Indonesia's expanding role is central to that trend. China, meanwhile, remains dominant in much of critical mineral refining.

Securing vital waters

Chinese coast guard vessels have periodically entered waters in Indonesia's exclusive economic zone near the Natuna Islands.

Indonesia is not a claimant in the main South China Sea island disputes, but China's expansive maritime claims overlap with its exclusive economic zone near the Natunas.

Jakarta has responded by increasing naval and coast guard patrols and, at times, escorting foreign vessels out of the area.

Those moves signal a firmer posture aimed at protecting sovereign rights without inviting escalation.

After one Chinese coast guard incident, Indonesian maritime law expert Arie Afriansyah told BenarNews that the response showed "the Natuna Sea is now being guarded more closely." He added that China's maneuvers appeared to be "a strategy to test the waters" under Prabowo's new government.

Indonesia has also advanced defense modernization, acquiring new frigates, submarines and patrol aircraft to improve maritime domain awareness and archipelagic defense.

Defense spending has risen, though it remains modest compared with some regional peers.

Analysts say the buildup is designed less for confrontation than for resilience against gray-zone tactics, including the use of coast guard vessels, fishing fleets and legal ambiguity to pressure states below the threshold of open conflict.

Balancing major powers

Economic relations with China remain deep.

Beijing is a major buyer of Indonesian commodities and a key investor in nickel processing facilities that support Jakarta's downstreaming ambitions.

That exposure brings capital, technology and industrial capacity. It also raises questions about supply chain vulnerability, environmental costs and the political risks of relying too heavily on one major market.

At the same time, Indonesia has expanded security cooperation with the United States and Australia, as regional partners place more emphasis on surveillance, interoperability and access arrangements to keep maritime corridors open.

Australia and Indonesia reached a treaty-level defense cooperation agreement in 2024 and formally signed the Australia-Indonesia Treaty on Common Security in February 2026. The pact deepens military cooperation and creates a framework for closer defense coordination.

Australian Prime Minister Anthony Albanese called the agreement "a vital plank" for regional stability.

Indonesia also continues to participate in the annual Super Garuda Shield exercises with the United States and other partners.

But Jakarta has framed such cooperation as capacity-building, not bloc politics.

"This dual-track diplomacy might seem inconsistent. But for Jakarta, it is strategic," Muhammad Zulfikar Rakhmat of the Center of Economic and Law Studies told The Associated Press. "Indonesia is embracing defense diversification, not alignment."

Prabowo has echoed that line. Asked in Washington about the South China Sea, he said Indonesia would "always safeguard our sovereignty" but added that "partnerships are better than conflicts."

ASEAN as a shield and platform

Jakarta continues to emphasize ASEAN as its primary diplomatic platform, including on South China Sea disputes.

The 2002 ASEAN-China Declaration on the Conduct of Parties commits parties to resolve disputes "by peaceful means" and "without resorting to the threat or use of force."

For Indonesia, that language is not just diplomatic boilerplate. It gives Jakarta a regional framework for resisting pressure while avoiding the appearance of joining a containment strategy against China.

By maintaining diverse relationships, Indonesia is trying to reduce overdependence while converting geography, resources and diplomacy into strategic leverage.

The challenge is execution.

Jakarta must protect its maritime rights, manage Chinese investment, improve military readiness and keep ASEAN central, all without eroding the nonaligned flexibility that has long defined Indonesian foreign policy.

As tensions persist, the question is not whether Indonesia will choose sides.

It is whether Indonesia can keep expanding its room for maneuver in a region where sea power and mineral power are becoming harder to separate.