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'Win-Win' Not Enough for China and Indonesia

Monday, March 8, 2010

China has designated 2010 "The Year of China-Indonesia Friendship" to mark the 60th anniversary of establishing diplomatic relations with the world's fourth-largest country. But while both countries are poised to reap major benefits from their improved bilateral ties, Beijing and Jakarta must manage their asymmetric relationship skillfully to mitigate potential tensions in the future.

Relations between China and Indonesia have certainly come a long way since the height of the Cold War. Beijing, then reviled by Jakarta as a fomenter of communist insurrection, is now welcomed as a key investor in Indonesia's economic future. Bilateral trade has mushroomed by an average annual rate of 20 percent since 2001, and China is now Jakarta's largest source of imports and third-largest export destination. The relationship has also matured beyond the economic realm, with more regularized people-to-people exchanges and the inking of a defense cooperation agreement in 2005. Beijing's ambassador to Jakarta, Zhang Qiyue, described Sino-Indonesian relations as having completed "one full cycle in the lifespan of a man," and added that it is now time "to start a new cycle of friendship." ...

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