China has made less effort with maritime connectivity projects, especially for projects in archipelagic countries. Many Indonesian observers have criticized the collaboration in the Jakarta-Bandung high-speed railway project, citing its misplaced emphasis on inland transportation and infrastructure in Java instead of maritime connectivity between outer islands, which was declared a prioritized objective of President Joko “Jokowi” Widodo in his Global Maritime Fulcrum strategy.

Chinese and Indonesian leaders have expressed goodwill in cooperation on maritime projects on several important occasions. However, there is no such mega-project cooperation on the sea as salient as the Jakarta-Bandung high-speed railway project. This is somewhat surprising when taking into account the shared political will of the two nations’ leaders and the positive bilateral relations at the moment.

What impediments hinder the cooperation of Jakarta and Beijing in maritime connectivity? First and foremost, policy coordination is inadequate between Beijing and Jakarta. The lack of policy coordination has resulted in two negative outcomes, ignorance and misplaced focus.

Chinese and Indonesian policymakers are insensitive to their counterpart’s updates of the maritime strategy and regulations. In 2017, the Indonesia government issued Presidential Regulation No. 16. It was the first comprehensive national maritime strategy in Indonesia and the first short-term action plan (2016-2019). This legal document detailed the long-term objectives and short-term goals, which are tantamount to a road map for every potential partner to cooperate with Indonesia on any maritime project.

However, the road map seems to have received little attention from Chinese academics or policymakers. In 2014-2015, President Jokowi’s Global Maritime Fulcrum strategy attracted huge attention among Chinese scholars and officials. Articles on Indonesia’s maritime strategy were published in almost every Chinese academic journal on Southeast Asian studies.

However, from 2016 onward, discussions on Indonesia’s maritime strategy began to wane. The enactment of Presidential Regulation No. 16 had little impact in China. The Indonesian government and stakeholders are also unfamiliar with the progress of Chinese maritime policies.

In 2017, China released two documents on maritime cooperation. The 13th five-year plan on national maritime economy development, released by the National Development and Reform Commission and the Maritime Bureau of China, set forth guidelines on maritime development as a national strategy.

In June 2017, the two institutions released another document titled Maritime Cooperation Initiatives under the Belt and Road Initiative. These guidelines for maritime project cooperation suffer from little introduction to Indonesian policy and academic circles.

The ignorance of each other’s maritime policy could lead to misplaced cooperation initiatives. In Presidential Regulation No. 16/2017, it is made clear that enhancing equality between the eastern and western parts of Indonesia is the primary goal of the country’s maritime development, so building a maritime highway, ensuring regular public shipping services to eastern Indonesia and constructing more ports as hubs of connectivity are essential goals in the maritime road map.

In current China-Indonesia maritime cooperation, the maritime highway initiative is a missing piece from the big picture. China should look into what Indonesia really needs, to take care of the most important issues regarding Indonesian people and social welfare.

The first step to realizing that goal is studying and analyzing Indonesia’s maritime strategy, to read carefully what is written in the laws and regulations and trying to understand Indonesians’ concerns and needs.

The other barrier in China-Indonesia maritime cooperation is that the investment climate in Indonesia is not conducive in a few industries. Although it is undeniable that President Jokowi has made much effort to improve the climate, complicated problems continue to hinder the inflow of foreign direct investment (FDI).

A few industries are not entirely open to foreign investors, such as the domestic and international shipping industry with a maximum 49 percent foreign ownership, and international sea passengers and cargo transportation with a maximum 70 percent ASEAN nation ownership.

In addition, a few industries are open to foreign investors according to Indonesian laws, but they are controlled by state-owned companies that are unfamiliar with the public-private partnership scheme. The port industry is still largely in the hands of state-owned PT Pelindo, which does not have many good examples of managing FDI. There is therefore still a long way to go for the Indonesian government to revise the regulations, open the market to FDI and improve the investment climate.

For future China-Indonesia maritime connectivity cooperation, there are two principles to bear in mind to achieve a win-win outcome. First is to tackle the priority objectives in the Indonesian maritime strategy, which is to reduce inequality between regions by developing the maritime highway to connect all parts of Indonesia. Second is to take care of Chinese investment returns.

Industrial park and port integration may be a potential cooperation framework. The general idea is that foreign investors do not only build industrial parks in coastal regions, but also work with Indonesian state-owned enterprises (SOEs) to build ports near industrial parks to provide private and public transportation services. The ports would mainly serve to meet the transportation needs of the industrial parks, while the rest of the loading capacity could be used for the transportation of parcels and passengers.

To realize this proposal, all relevant parties should contribute. Foreign investors would be obliged to provide the funds needed to build ports. If a local government and SOEs could not contribute financially, they could help with land acquisition and provide land as capital input. Beijing should play a supervisory role to monitor Chinese investors’ activities in Indonesia and provide foreign currency exchange and remittance convenience based on an investor’s performance.

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The writer is an assistant professor at the Institute of International Studies, Fudan University, China.

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