Indonesian President Prabowo Subianto yesterday wound up a visit to China, his first since taking office last month, signaling an intention to maintain good relations with Beijing in order to support his domestic economic agenda. During the November 8-10 trip, Prabowo met with high-ranking officials including President Xi Jinping, Premier Li Qiang, and Zhao Leji, the chairperson of the National People’s Congress.

During the visit, the two sides signed a series of agreements valued at approximately $10 billion, focusing on infrastructure, green energy, digital technology, and agriculture. In a joint statement after the leaders’ meeting, the countries agreed to enhance collaboration in sectors such as new energy vehicles, lithium batteries, photovoltaics, and the digital economy, Reuters reported.

A particularly significant aspect of the visit was the emphasis on the global energy transition. One agreement focused on the establishment of a Green Mineral Resources Partnership, to support the two nations’ respective renewable energy transitions. These projects align with Prabowo’s broader goal of developing Indonesia’s renewable energy capacity. The partnership also includes inviting investments in Chinese-led industrial parks in Indonesia, particularly North Kalimantan Industrial Park, indicating that China may play a significant role in the development of the new capital city, Nusantara.

One of the most intriguing aspects of Prabowo’s visit was China’s endorsement of his government’s initiative to provide free nutritious meals to Indonesia’s poor, a cornerstone of his broader social welfare agenda. China pledged to provide an unspecified amount of financial assistance to the scheme. During the visit, Prabowo said that he hoped to learn from China’s experience in poverty alleviation “We want to learn from [the] Chinese experience, [particularly] how it has developed very rapidly in the last 30 years, especially in alleviating people from poverty,” said Prabowo in his meeting with Li Qiang.

Nonetheless, the visit seems to neglect several issues that have become concerns in Chinese economic activities in Indonesia. One of the most pressing issues is the environmental and social impact of Chinese-backed investments. For example, the large-scale mining projects funded by China, such as nickel extraction in Sulawesi, have become associated with deforestation, water pollution, and the displacement of local communities.

In addition to environmental issues, there are also concerns regarding the social impact of Chinese investments in Indonesia. A number of projects funded by China have faced criticism for poor labor conditions, with workers subjected to low wages, minimal protections, and exploitative working environments. Moreover, local communities have often found themselves sidelined in favor of foreign workers, particularly in skilled positions.

The meetings, however, did not discuss how the two countries must strike a careful balance between economic activities and sustainable practices. The two must ensure that Chinese investments align with Indonesia’s long-term environmental and social goals as well as that the economic benefits of these projects reach local communities.

Another important aspect of the visit is a memorandum of understanding (MOU) for joint development in the disputed waters in the South China Sea, particularly around the Natuna Islands. The agreement includes cooperation on fisheries, oil, and gas exploration in areas around the Natuna Islands, where China’s “nine-dash line” claim overlaps with Indonesia’s exclusive economic zone. While this collaboration may bring economic benefits, some observers say that it risks implicitly validating China’s territorial claims in the South China Sea, which were rejected in 2016 by an arbitral tribunal in The Hague.

A de facto recognition of China’s claims could undermine Indonesia’s sovereignty, potentially complicating its relationships with other Southeast Asian claimant states and the United States and its allies.

While the full details of the agreement remain unclear – the Indonesian Foreign Ministry has issued a statement clarifying that the agreement does not amount to a recognition of China’s maritime claims – Indonesia’s handling of its relationship with China in the South China Sea will be a key test of Prabowo’s diplomatic balancing act. Indonesia has long cultivated strong ties with both the United States and China, and Prabowo is keen to preserve this balance, as evidenced by the fact that he has followed up his visit to Beijing with a visit to Washington to meet President Joe Biden.

Indonesia’s position as a major player in the Indo-Pacific gives it leverage in balancing the competing interests of the U.S. and China. Prabowo has emphasized the importance of ASEAN centrality in regional affairs and reaffirmed Indonesia’s commitment to neutrality in the South China Sea disputes.

Prabowo’s decision to make China the destination of his first overseas trip as president signals a continued commitment to deepening China-Indonesia relations. However, this comes with a set of risks that must be carefully managed. These risks include potential over-reliance on Chinese investments, environmental and social challenges, and the need to uphold Indonesia’s sovereignty in the face of China’s assertive regional actions, particularly in the South China Sea.