T

he trade war between China and the United States has brought beneficial “long-term” economic opportunities to Indonesia, an expert said on Wednesday.

Lyle Morris, a senior policy analyst at the RAND Corporation, said the trade war had placed Indonesia in the tough position of standing between two superpowers.

He said Jakarta could benefit from the uncertain market and investment climate in China. The situation has prompted foreign companies, especially those from the US, to rethink investing in China, he added.

“I think this is a long-term opportunity for Indonesia to be a recipient of more US investment,” he said on the sidelines of the 2018 Jakarta Geopolitical Forum.

“I think certain companies are looking elsewhere to invest; countries they feel are more convenient and stable, like Indonesia.”

Morris said Jakarta should convince foreign investors by providing clear regulations and guaranteeing investment stability.

He added that the government must also be more active and aggressive in strengthening business relations with the US and other countries.

“Indonesia is building more and more infrastructure like ports, railroads and airports. That will be the basis for US companies to see Indonesia as an attractive partner,” he said. “The more you develop infrastructure, the more attractive you will be to US firms.”

Asked whether such a move would risk Jakarta’s ties with Beijing, he said it was unlikely as it was not a zero-sum game and provided equal opportunity for the US, Indonesia and China.

The Jakarta Geopolitical Forum was themed, Mapping the Future of Geopolitics, highlighted three main issues: The US-China trade war, Indo-Pacific regional concept and China’s Belt and Road Initiative.

Morris told the forum that the trade war had been triggered by a US trade deficit as well as Washington’s demand for Beijing to change its industrial policy.

The US has claimed that Chinese economic aggression allowed and threatened, among other things, its technology and intellectual property.

Meanwhile, geopolitical intelligence platform Stratfor senior analyst Zhixing Zhang said the trade war could push China to seek alternative trade routes, so that it would not depend on the US and European markets.

To maintain economic and political resilience, Beijing would likely seek ways to keep its “only asset” in the region, namely the South China Sea, she said.

Rich in natural resources, the South China Sea is also a very busy trade route that sees US$5 trillion pass through its waters per year, she added.

Zhang suggested that China could, among other things, change the status quo in the region to control the South China Sea.

“The trade war has prompted China to find an alternative path for its economy. During this time, the common narrative is that China is an expansionist power.”

Meanwhile, Perth USAsia Center researcher Natalie Sambhi emphasized that the Indo-Pacific narrative should focus on economic, geopolitical and humanitarian issues.

“Increasingly, a lot of issues connect us on a human and societal level in the Indo-Pacific. And those kinds of issues can undermine peace and stability in the Indo-Pacific,” she said, calling on stakeholders to think about peace and stability “in a different way”.

In her presentation, titled Indo-Pacific Beyond the Axis of Inter-Subregions in Asia-Pacific, Sambhi underlined two major humanitarian issues in the so-called Indo-Pacific region: Climate change and workforce evolution.