Could a ‘more focused’ US gain an edge over China in contest for Indonesian tech business?

Could a ‘more focused’ US gain an edge over China in contest for Indonesian tech business?

The United States has a “rare” opportunity to become a key partner for Indonesia in areas such as emerging technology and digital infrastructure despite Jakarta’s close economic ties with China, a study has claimed.

But Washington needs a more ambitious and strategic form of statecraft to do so, according to the report from the Centre for a New American Security, a Washington think tank.

The researchers argued that Indonesia had become a “key front” in the US-China rivalry to shape critical digital infrastructure and ecosystems as both superpowers acknowledged the growing importance of Southeast Asia’s largest economy, with its abundant energy and mineral resources.
Beijing has cemented its position as the region’s key trading partner, including through its Belt and Road Initiative. Washington meanwhile has its Indo-Pacific Economic Framework for Prosperity, seen as a way to counter China’s growing economic clout.

While Indonesia has long pursued a policy of strategic autonomy – where the US is its preferred security partner and China is key for investment and trade – the researchers said this approach increasingly conflicted with the reality of deepening political, economic and technological ties with China.

“This may have been possible in an era of warmer Sino-US relations, but as Beijing and Washington increasingly decouple their economies – especially for sensitive technologies – this balancing act could prove untenable,” the report said.

It also spelled out how China had “shrewdly cultivated” Indonesia, including becoming the country’s largest foreign investor and seeking to position itself as the tech partner of choice.

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