Prabowo Subianto, explained.
Indonesia's President Prabowo Subianto at the Merdeka Palace in Jakarta, 2 July 2026 (Yasuyoshi Chiba/AFP via Getty Images)
Indonesian diplomacy is in overdrive, but more China dependence is narrowing Jakarta’s options.
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Under Prabowo, Indonesia is more active than ever – but less freeUnder Prabowo, Indonesia is more active than ever – but less free
Long before assuming the presidency, Prabowo Subianto cultivated a reputation as a champion of a more assertive, muscular Indonesian posture on the world stage. Standing on the stage to deliver his inauguration address before the People’s Consultative Assembly in Jakarta in October 2024, he reaffirmed his commitment to Indonesia’s traditional “free and active” (bebas dan aktif (Opens in new window)) foreign policy, vowing to elevate the nation’s standing while resisting being pressured or pushed around by stronger states.
Indonesia, Prabowo declared, would chart its own course on its own terms.
Nearly two years into his presidency, the “active” dimension of Prabowo’s posture is undeniable, bordering on what some describe as diplomatically “hyperactive” (hiperaktif (Opens in new window)). Since taking office in late 2024, he has visited nearly 30 countries, rivalling the travel volume of his predecessor, Joko “Jokowi” Widodo, over nearly a decade in power. Eager to project Jakarta as a leading powerbroker, Prabowo has touted himself as an aspiring mediator in conflicts from Ukraine to Gaza to Iran, steered Indonesia into BRICS membership, and maintained a constant presence across multilateral summits.
Yet, looking past the diplomatic theatre and headline-grabbing summits reveals an uncomfortable reality: Indonesia’s foreign policy may be more active, but it is increasingly constrained where it matters most: its relationship with Beijing.
Confronted by mounting domestic economic strains, Jakarta has steadily lost room to manoeuvre to an assertive China that provides critical capital while demanding deference on its own terms. Missteps in foreign policy have raised questions about Jakarta’s ability to maintain its non-alignment posture. While Indonesia continues to profess its bebasaktif doctrine, successful hedging (Opens in new window) demands two vital assets Jakarta currently lacks: a disciplined resistance to external dependence and precise diplomatic signalling. Without them, growing concessions to Beijing threaten to hollow out Indonesia’s treasured strategic independence.
Lacking discipline? Boats off Bali (Ryan Rayburn/IMF Photo)
The bedrock of Indonesia’s foreign policy leverage has long been its demographic and economic weight as the anchor of Southeast Asia, combined with careful hedging to preserve its independence from great-power influence.
Under Prabowo, however, self-inflicted policy choices and external shocks have eroded that foundation.
Squeezed by ambitious spending mandates, sluggish foreign direct investment outside resource extraction, and energy subsidy burdens exacerbated by Middle Eastern volatility, Jakarta faces acute fiscal strain. The 2025 budget deficit widened to 2.9% (Opens in new window) of GDP and is projected (Opens in new window) to hold at that rate in 2026, marking the country’s widest non-pandemic shortfall in two decades. Compounding the crisis, the rupiah plunged to historic lows (Opens in new window), ranking as one of the world’s worst-performing emerging market currencies. Strained trade relations and restrictive demands from Washington further narrowed Jakarta’s options. Despite diplomatic outreach to partners such as Japan, Australia (Opens in new window), India (Opens in new window), and the United Arab Emirates (Opens in new window), no alternative partner possesses the economic size to offset the shortfall.
Under these pressures, the administration has treated Beijing as an economic lifeline.
Prabowo’s approach reflects the sheer scale of Indonesia’s economic reliance on China. China has been the country’s largest trading partner since 2013, dominating bilateral flows through sustained double-digit growth over the past decade. In 2025, two-way trade surpassed US$160 billion (Opens in new window), accounting for more than 30% (Opens in new window) of Indonesia’s total foreign trade. Beyond absorbing Indonesian raw commodities, China serves as the country’s primary supplier of non-oil imports, ranging from heavy industrial machinery to everyday consumer goods. Capital flows mirror this trade dominance: Since the launch of the Belt and Road Initiative, the China-Hong Kong bloc has risen to rival Singapore as Indonesia’s top source of foreign capital (Opens in new window), funnelling billions annually into nickel mining and processing, manufacturing, and infrastructure construction.
Successful hedging demands two vital assets Jakarta currently lacks: a disciplined resistance to external dependence and precise diplomatic signalling.
Prabowo chose Beijing for his first state visit as president, touting more than US$10 billion (Opens in new window) in bilateral deals to help underwrite his growth targets. Jakarta has since actively lobbied Beijing to bankroll priority projects – from the multibillion-dollar eastward extension of the Whoosh high-speed rail line (Opens in new window) from Bandung to Surabaya to reviving stalled development in the new capital, Nusantara (Opens in new window). In his recent state budget address (Opens in new window), Prabowo lauded this financial alignment, celebrating the successful issuance and top ratings of Indonesia’s yuan-denominated “Panda Bonds” as proof of economic resilience.
Yet, this dependence has steadily eroded Indonesia’s leverage across various socioeconomic aspects, constraining Jakarta’s ability to push back when Chinese actions conflict with its interests.
Consider the quiet devastation of the domestic manufacturing base. In recent years, Indonesia’s labour-intensive textile and garment sectors, once the lifeblood of working-class employment in West and Central Java, have reeled under waves of cheap substitutes of Chinese imports. The bankruptcy of household-name titans like Sritex (Opens in new window) and the shuttering of dozens of factories have displaced hundreds of thousands of workers. However, rather than imposing decisive safeguard tariffs or confronting Beijing over trade distortions, Jakarta has repeatedly hesitated (Opens in new window), fearful of triggering retaliatory measures or alienating Chinese financiers.
Even in the critical mineral sector, where Jakarta ostensibly wields its strongest hand, the government was forced into a telling compromise.
Under Jokowi, Indonesia initiated an ambitious downstreaming (hilirisasi (Opens in new window)) policy to compel foreign smelters, predominantly Chinese-owned, to invest in domestic processing rather than simply extracting and exporting raw nickel ore. Under Prabowo, whose economic nationalist agenda has intensified state intervention, Jakarta sought to tighten its grip with measures (Opens in new window) including stricter mining quotas, royalty hikes, and mandatory divestment rules to transfer equity to Indonesian state entities. While foreign investors across the board grew uneasy over the increasingly volatile regulatory climate, only Chinese investors pushed back forcefully. In May 2026, the China Chamber of Commerce in Indonesia (CCCI) delivered a rare and blunt protest letter (Opens in new window) directly to Prabowo, copied to China’s embassy in Jakarta, warning that abrupt mining quota cuts, proposed royalty hikes, and aggressive enforcement threatened stalled projects and capital flight. This pushback laid bare the structural limits of Indonesia’s resource nationalism against a counterpart holding deep refining technology and monopsonistic purchasing power. Although the contest remains active and Jakarta continues to wield mining quotas, the state’s regulatory assertiveness encountered an unyielding counterpart in Beijing. Confronted with the risk of widespread smelter idling and damage to high-priority national targets, senior ministers engaged in emergency consultations, (Opens in new window) quietly postponing planned mineral royalty hikes and entertaining exceptional, case-by-case quota adjustments.
Eventually, pragmatic economic considerations compelled Jakarta to recalibrate: to safeguard broader capital flows and secure Chinese commitments for higher-value domestic priorities such as integrated EV battery ecosystems, Prabowo moved to reassure investors by establishing an investment acceleration task force under Presidential Decree No. 4/2026 (Opens in new window) to bypass bureaucratic gridlock and expedite licensing. When Chinese Foreign Minister Wang Yi visited Jakarta in August 2026, he called upon Indonesia to provide a “safe, stable, and favourable business environment (Opens in new window).” Beijing clearly expects Jakarta to play nice with Chinese companies to secure continued capital backing.
Equally glaring is Jakarta’s silence regarding the socio-environmental costs (Opens in new window) wrought by Chinese-dominated nickel hubs in Central Sulawesi and North Maluku. Captive coal plants, deforestation, toxic runoff, and poor labour safety records have fuelled fierce domestic backlash. These issues stem not solely from Chinese investors but are compounded by Indonesia’s own institutional weaknesses (Opens in new window). Indeed, Jakarta’s recent wave of crackdowns on illegal mining (Opens in new window) is driven primarily by state revenue recovery rather than genuine environmental remediation. Thus, Jakarta rarely raises Chinese miners’ socio-environmental toll publicly or systemically to Beijing, fearing that bilateral friction could deter future manufacturing investments. Officials treat the ecological and human damage as an acceptable cost of doing business, socialising the fallout at home while shielding Chinese operators from accountability.
This deepening economic reliance has softened Jakarta’s diplomatic tone. When Chinese nationalistic netizens (Opens in new window) pushed back against Indonesian regulatory shifts as troubling and untrustworthy, Jakarta maintained silence. Yet, when Singaporean outlets like The Straits Times reported (Opens in new window) on Chinese investor anxieties and questioned Indonesia’s fiscal trajectory under a “Sell Indonesia (Opens in new window)” outlook, pro-government circles and nationalist online mobs erupted in outrage, mounting hostile “Sell Singapore (Opens in new window)” campaigns. These dynamics reveal diplomatic restraints toward Beijing.
Photos via @prabowo/X
While Jokowi aggressively courted Chinese capital, his administration by and large held the line on issues of sovereignty (Opens in new window). Jokowi strictly avoided bilateral joint statements with Beijing on disputed waters. He maintained that it was a non-claimant state in the South China Sea, flatly rejecting Beijing’s unlawful nine-dash line. Jokowi also asserted Indonesia’s undisputed exclusive economic rights around the Natuna Islands under the 1982 UN Convention on the Law of the Sea (UNCLOS).
That clarity started to unravel within months of Prabowo taking office.
In an official bilateral joint statement signed during Prabowo’s late-2024 Beijing visit, the two governments agreed to pursue joint maritime development in areas of “overlapping claims”. Though Indonesian diplomats hastily scrambled to issue damage-control statements reaffirming Jakarta’s legal position, the concession (Opens in new window) was already locked in. By formally endorsing language that acknowledged “overlapping claims,” even for only a short time, Jakarta handed Beijing a legal and rhetorical victory by implicitly legitimising China’s expansive maritime overreach inside Indonesia’s own exclusive economic zone.
While an isolated misstep might be excused, successive policy errors have begun to undermine the credibility of Indonesia’s balanced non-alignment. When the People’s Liberation Army Navy (PLAN) conducted bilateral naval manoeuvres with Indonesia in the Western Pacific in August 2026, directly east of the Taiwan Strait, Jakarta downplayed the exercises (Opens in new window) as routine passing drills without combat intent.
Yet, military interactions cannot be divorced from their strategic symbolism (Opens in new window), especially from Beijing’s viewpoint. By participating in a highly visible exercise near one of the Indo-Pacific’s most sensitive flashpoints, Jakarta underestimated both how regional observers would perceive the move and the toll it would take on its own non-aligned posture.
Despite concerns over Indonesia’s growing closeness (Opens in new window) to China and the recent missteps, Wang Yi’s August visit to Jakarta also resulted in the first-ever 2+2 Joint Foreign and Defence Ministerial Dialogue (Opens in new window) designed to deepen Indonesia-China defence ties. Planned outcomes include Chinese munition, rocket, and missile factories in Indonesia, technology transfer, and expanded bilateral exercises. Although informed sources in Jakarta emphasise the 2+2 dialogue’s nascence, Prabowo appears intent on tightening Indonesia’s security relationship with China, the main policy area where Beijing lags the United States (Opens in new window).
However, Indonesia’s moves should not be mistaken for taking sides with Beijing. A parallel erosion of Indonesia’s neutrality was evident on the other side of Jakarta’s balancing act. Eager to repair a rocky bilateral relationship with the United States, Indonesia signed an Agreement on Reciprocal Trade (Opens in new window) in February 2026, paving the way for high-level engagement with Washington and the eventual signing of the Major Defence Cooperation Partnership (Opens in new window). While the pact promised expanded defence collaborations, it also ignited domestic backlash. Leaks (Opens in new window) detailing an alleged US request for standing military overflight clearance during contingencies – implicitly for a Taiwan Strait crisis – coupled with persistent speculation over American basing access (Opens in new window) put Jakarta on the defensive.
Even after official denials (Opens in new window), the episode exposed the central hazard of Prabowo’s hyperactive diplomacy: in striving to accommodate both superpowers, Jakarta risks projecting contradictory signals that undermine its non-aligned credentials.
Manggarai Station, Tebet, South Jakarta, Indonesia (Ammar Andiko on Unsplash)
Successful hedging requires deliberate, disciplined signalling. To preserve its traditional “free and active” doctrine, Jakarta must balance receptivity with restraint, remain engaged yet non-committal, reassuring yet autonomous. Under Prabowo, however, sidelining career diplomats (Opens in new window) at the Ministry of Foreign Affairs in favour of centralised, top-down diplomacy has only heightened the danger. The resulting cycle of hasty commitments, public outcry, and awkward walk-backs undermines Jakarta’s credibility, leaving Indonesia vulnerable to accusations of alignment from both Washington and Beijing.
This vulnerability is most acute in frontier domains where ambiguity is disappearing, particularly the zero-sum competition over Artificial Intelligence (AI). Jakarta’s decision to join (Opens in new window) Beijing’s World Artificial Intelligence Cooperation Organisation (WAICO (Opens in new window)) as a founding member was driven by a desire for Chinese tech capital and knowledge sharing. However, Beijing treats AI as a vital pillar of national security and great-power rivalry, making it difficult for member states to resist its restrictive technical and geopolitical orbit. Jakarta’s concurrent openness (Opens in new window) toward the US-led Pax Silica (Opens in new window) only heightens the contradiction. It remains doubtful whether (Opens in new window)Washington will tolerate a partner straddling rival digital blocs. Even less certain is whether Indonesia can withstand Beijing’s economic retaliation, should China weaponise its own supply chain regime (Opens in new window).
Ultimately, Jakarta’s deepening economic dependence risks making that choice by default.
By mistaking diplomatic hyperactivity for genuine independence, Indonesia may be sleepwalking (Opens in new window) into strategic subordination. To safeguard its autonomy, Jakarta must re-anchor its foreign policy in institutional expertise and regulatory guardrails, replacing reactive dealmaking with calculated leverage. Without these, Indonesia’s foreign policy will remain active in motion, but constrained in substance.
For a president who pledged to safeguard Indonesia from external dominance and for a nation anchoring ASEAN’s collective resilience, the stakes could not be higher. In an increasingly polarised Indo-Pacific (Opens in new window), if Jakarta fails to sustain credible hedging, both Indonesia and Southeast Asia risk being inexorably drawn into Beijing’s gravitational orbit.
The authors’ views expressed here are personal and do not reflect the official policy or position of the Department of the Army or any US government entity.
About the authors
Jessica C. Liao
Jessica C. Liao is an associate professor of Asian studies in the Department of National Security and Strategy at the US Army War College, a non-residential senior fellow at the Foreign Policy Research Institute, and an adjunct professor in the Asian Studies Program at Georgetown University’s Walsh School of Foreign Service.
Lucas Myers
Lucas Myers is the assistant director of the Program on China and the United States at the University of Maryland and a non-resident visiting scholar at the Sigur Center for Asian Studies at George Washington University.
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