Kicking Off Our New Podcast Series: Not To Judge

Foreign Policy Talks is proud to launch its latest podcast series, Not To Judge, a platform for candid and thought-provoking conversations on diplomacy, strategy, and the shifting dynamics of global affairs.

🎧 Listen to the inaugural episode now

In this first episode, Noto Suoneto sits down with Kevin Zhongzhe Li from Center for China Analysis of Asia Society Policy Institute (ASPI), a leading scholar on China and Southeast Asia, to explore how Indonesia and China have navigated their partnership over the past year, balancing principle with pragmatism.

How have both nations managed the political, economic, and environmental risks that define their engagement today? More importantly, how can these challenges be turned into opportunities for deeper cooperation?

Kevin offers his insights on the future of Indonesia–China relations, providing thoughtful recommendations for policymakers and emphasizing how mutual understanding and strategic foresight can help both sides achieve more inclusive and sustainable progress.

Tune in to understand the nuanced realities behind one of the region’s most important bilateral relationships and what lies ahead for Indonesia and China in an increasingly complex global landscape.

About the Guest

Kevin Zongzhe Li is an environmental scientist and policy analyst specializing in the geopolitics of the energy transition and China–ASEAN relations. He is a former Affiliated Researcher at the Asia Society Policy Institute’s Center for China Analysis, where his work focuses on Indonesia’s energy transition, China’s industrial engagement in Southeast Asia, and the evolving dynamics of regional cooperation.

About the Host

Noto Suoneto is the Founder of Foreign Policy Talks. His scholarly engagement with China dates back to his undergraduate studies, during which he authored a thesis on China’s Foreign Aid to Africa. This academic interest was further developed in his master’s research, which examined the political and economic intersections of China’s Belt and Road Initiative (BRI) in Indonesia.

He has served as Secretary of the China Policy Group (CPG), a consortium comprising Indonesia’s foremost academic experts on Chinese affairs. In recognition of his academic excellence and leadership, he was selected as Indonesia’s representative to the Yenching Academy at Peking University in 2019.

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Transcript

Noto: Right, Hi listeners! So welcome to “Not to Judge” by Foreign Policy Talks and thank you for being the loyal listeners of this podcast for years. So this is Noto, as you know, but today I'm not alone. I would like to welcome my good friend, Kevin Li. Hi Kevin!

Kevin Li: Hey Noto, it's great to be on this podcast with you! 

Noto: Hi. So I've been knowing you not since a long time ago and I know you've done impressive work in observing Indonesia-China relationships. So maybe we start by telling us about you and what kept you busy these days?

Kevin Li: Sure. Sure. I am an affiliated researcher at the New York-based Asia Society Policy Institute with their Center for China Analysis where I look at the intersection between the geopolitics of the energy transition, but also China-ASEAN relations, particularly China-Indonesia relations. My current work looks from Indonesia's energy transition to China's industrial engagement in Southeast Asia, to the evolving dynamics of regional cooperation. I am an environmental scientist and also a public analyst, public policy analyst by training and looking forward to the discussion here today.

Noto: Wow, that's an impressive background, Kevin. And tell us about what's the difference between Asia Society and A-S-P-I, right? Asia Society Policy Institute that you mentioned.

Kevin Li: The Asia Society is the umbrella organization that was started back in the 1960s. A US-based nonprofit organisation that was aiming to deepen its understanding of Asia in general. So it covers programs ranging from education to arts to museum to, also, of course, policy. The Asia Society Policy Institute was a relatively sooner establishment when then President Kevin Rudd, the ex-Australian Prime Minister who is fluent in Chinese, started over at the Asia Society. So our work touch on variety of topics that has to do with Asia, but the Center for China Analysis specifically looks at all aspect of Chinese domestic politics, looks at foreign policy, look at security and trade, look at technology and the environment. So that gives you a sense of sort of what we're interested in and what we cover.

Noto: Wow, that's very interesting and I think the listeners now know how to differentiate, right? Between these two institutions. They are affiliated for sure. But  you mentioned that you also covered Southeast Asia, but I think for today's talk  Kevin, allow me to discuss deeply on Indonesia-China relations and then as you probably know that Foreign Policy Talks have done research also on this and it's been very dynamic over the time, right? different administrations deal with China quite differently in my opinion. And of course that there's up and down. 

Especially when you see that during President Jokowi's time, in our observation that the relationship has been growing very much and today or yesterday actually Kevin, it's been one year of Prabowo's administration since last year. So, I think my first question to you would be, how would you generally assess the current state of Indonesia-China relation? And how do you characterize the nature of dynamics of this partnership based on your observation or research?

Kevin Li: I think this is a great question to start. And the way I think about this bilateral relationship is really it's consequential and it's very pragmatic and I think you cannot begin by not looking at the economics between the two countries. Trade in 2024 surpassed $130 billion. China remains one of Indonesia's largest investors, both in terms of public finance, but also in terms of private investments. We are all very much familiar with large-scale projects such as industrial parks or the high-speed rail and this sort of is the microcosm of what this relationship is. 

It's high economic investments, high economic payoff, but also situated in a sort of high policy complexity environment. So, there's deep structural interdependence between the two countries. And I'm glad you mentioned President Jokowi because I think there has been noted by a lot of observers where President Jokowi's dealing with China was very much around infrastructure, energy investments, whereas  President Prabowo does continue these economic ties, but as as we see, he's also more visible in his engagement with China, right? He was in China for his first overseas visit, though also immediately followed by the US. Right? 

He was getting Indonesia to enter into BRICS in January, and remember, this was before President Trump had even, you know, taken office. This is also before the tariffs have arrived, right? And most, you know, consequentially for the optics was when President Prabowo attended the Beijing's military parade on September 3rd  when there were ongoing protests in Indonesia, but on picture, he was standing right next to a couple of major powers in the world including President Putin, including President Xi himself, Kim Jong-un, President Lukashenko from Belarus. So, so he was sort of that first row image in Beijing. 

So, coming back to your question, right? I think President Prabowo is a realist, he's pragmatic. And of course, he is absolutely vocal about building ties with everyone. But I think in today's environment, that leaning, that tilting towards China is happening within reason, right? It's sort of Indonesia's 8% economic growth that requires additional investments flowing in from abroad. It requires keeping options open for a rising middle power like Indonesia. And this is not just happening in Indonesia, it's happening across Southeast Asia. You're seeing heads of states, seven heads of states or heads of government present at Beijing's military parade. 

All trying to recalibrate what is happening in the world and how do you balance between dependency or interdependence or resilience. And coming back to Indonesia, I think what's unique about Indonesia also is that public opinion around China does remain mixed with enough of a historical, perhaps, some would even argue, ethnic tension or lingering effects of such tension still remain within the society.

Noto: Wow, and if we track our history, Kevin, our relationship with China has just been recovered when Indonesia entered the democratic era, right? So I'm wondering based on what you said about the pragmatic base relationship and the structural interdependence, when do you think it started? Is it really sparked between Jokowi and President Xi? I mean President Jokowi and President Xi or when do you think it really reached the peak of our relationship of this economic interdependence as you mentioned?

Kevin Li: I think it began when China became the manufacturing hub of the world. It began when China was able to produce goods and services at the price and the quality that it does today. It began when China became sort of that stability anchor, mostly in economic terms, not in security terms, of course, but that economic stability anchor of the world. And this has been further accelerated with what we are seeing in the United States, for example, or in other countries where their intention or their attention to Asia or to Southeast Asia is taking a back seat.  

So, I think one of the things I've been thinking a lot about is why China, why so much China and Southeast Asia? Why is China surpassing countries like Japan or South Korea who have been traditionally long-term investors in regions in countries like Indonesia? 

I think one, China offers a lot of cash, it offers a lot of capital. Yeah. That gives paired with China's speed to to build or to construct and to deliver, gives a sort of sense of predictability. It allows return on investments to realize quicker than some of their main competitors. 

Two, I think China is rather well-invested in relationships that outlast typical political cycles, right? So, for example, with Japan's potentially upcoming new Prime Minister Prime Minister that are representing a different administrative approach to say foreign assistance or foreign development. Could that potentially affect the amount of capital flow or aid flow that can go from Japan to say a country like Indonesia? And I think what China does better there is their investments actually survive changes in leadership. 

And third, I think is what China has been churning out a lot in terms of these global initiatives, global development, global civilization. And I think it's creating this image where even though China is, you know, becoming eventually an advanced economy, it situates itself as a global south country. And that creates some sort of solidarity and camaraderie during a time when that sort of leadership or or sort of vision tends to get lost when there's so much geopolitics and there's so much changes going on in the world. So, sort of that interdependence slowly grew over time. 

But it's not, Noto, it's not in my view just Indonesia that has this relationship with China. It's most countries that they all are sort of grappling with that relationship, that balance between growth, balance between resilience, balance between agency.

Noto: Right. I was actually about to ask you about what are the selling points of China in engaging Indonesia or countries in the region, and thank you for telling us the three points that you have said. And I think if I just want to cover a bit about the change that I see here in Jakarta before, I'm sure the listeners also know about this, that we characterize China as our economic partners where we also link with the US in terms of security partnerships, right? 

So, somehow analysts or people divide the relationship into these two sectors, right? So, we work with China on economy, we work with the US on security. But it seems that under President Prabowo, it's not really like that, right? So, we just purchased  Chinese jets. So it seems that we also want China to be a good security partner for us. I don't know, I don't know whether you want to cover this or not, but this is what we see here Kevin. And maybe just to add also on that point. 

You said about China has been doing high economic investment, right? But of course, it will also come with high economic risk, right? For Indonesia. And I'm sure your research also touches on this point. How do you think Indonesia at this moment manage the risk, whether it's on economic risk, whether it's on financial risk, or even political risk?

Kevin Li: I appreciate your question about sort of the evolving role of China. So, let me get to that first before we move on to the risk side of things. I think what is really happening here is happening on both sides. You've mentioned that, you know, potentially China's role could move beyond as a purely economic partner. And we're seeing that unfolding actually rather quickly within the region. 

In fact, you must be aware that Indonesia has just signed a $9 billion deal with China to purchase J-10s from Chengdu. And that's, you know, the first time that China is selling J-10 to Southeast Asia. In fact, it's only the second country that China has ever would have been sold its J-10s abroad. 

So, I think what is changing here is not just, you know, purchasing or or buying up goods from China, but I think the era of China's China's wolf warrior diplomacy has ended, right? You you start seeing now that Beijing is interested for the first time, I think, in recent years in investing in soft power. Investing in relationships, investing in sort of the rhetoric around not just being optically another member of the Global South, but really, I think, really creating that opening for countries like Indonesia, other countries in the Global South, to also get a sense of what's really happening in China, right? I think with more of that less hard, less rigid, more human-centered approach, I think we're seeing China creating that opening. 

The new K visa, which is going to attract young people who are trained in STEM and who are trained with good degrees to come explore China as an alternative to the US. That's it's really, you know, it's it's creating these openings that I think that creates opportunities for other countries to start exploring, to start seeing. 

But on your second question there, about the issues that has came, let's say, for example, the Belt and Road Initiative and the lessons that have came out of these investments. I think the real challenge here, the real challenge here is the quality of that interdependence. It's not the interdependence itself. Because we see that countries like Japan or countries like South Korea can have long-term partnerships with countries like Indonesia without running into some of these potential risks. 

From the Indonesia side, I would say you don't want that dependency, right? But I also think from China, from Beijing, I think they understand that as well. The real question is, how do you create that more balanced, what I call more reciprocal relationship. In some of my work, especially looking at the clean energy  partnership between the two countries, I've come up with what I call five guiding principles for a more reciprocal relationship. 

I think first is what I call enhanced reciprocity. That means it has to create both value, shared value for both sides. It can't be simply based on quick leverage or access, it has to be more so built on trust. And that's what I believe some of the other Northeast Asian countries have historically tended to do better with countries of the Global South and I think that's where it requires a bit more work from Beijing. 

And second, what I call de- development-compatible decarbonization. In my research, you know, people tend to think that we need to achieve climate progress, but at what expense? And I think it is really important to understand that we cannot engage in energy transition at the expense of economic competitiveness, right? So Indonesia still needs to create jobs, it needs to be able to export and be able to access reliable power, reliable forms of energy generation. 

Third, I would say local value creation. That means investments, whether from China or not, should generate employment opportunities, can upskill workers, and can build local supplier ecosystems within Indonesia. 

Four, finance that's aligned with green and ESG, right? That can further enable and create incentives that align with Indonesia's development priorities, environmental priorities. And lastly, I just say transparency. I think that's a main issue when it comes to bilateral dealings, that funding or capital finance that doesn't flow through the World Bank or the IFC or the AIIB, tends to not live up to its full ESG potential. I think that's also important in the context of Indonesia and China.

Noto: Yes, I totally agree with you on transparency and I think that this improvement is really needed for both sides, right? For the Indonesian government, for the Chinese government to really look into how the deals can be seen as positive moves, right? By the local people and not, you know, like hiding a lot of information behind.  

And thank you very much for sharing us the five guiding principles of the relationship and I think I really recommend the listeners to really look into your research and understand more about that deeply.  I want to touch a bit on manufacturing, Kevin. As you know, I personally care about how Indonesia can enhance its economic competitiveness and I know what President Jokowi did in terms of developing our downstreaming industry has been, yeah, in a short time giving positive benefits, right? For Indonesia in general. 

But we know that mostly of this downstreaming industry has been involving Chinese partners, right? Or Chinese investors. So, I just want to know your opinion about how do you think our relation with China is in terms of our development of our industry? How do you see the way of Indonesia's government in specifically to ensure that there is a domestic innovation also happen in this process, on how we can also ensure there is a technology transfer, right? How we can also learn from China on how we can develop our industry. So, it's not only Indonesia seen or perceived as a manufacturing base, right? So, what's your suggestion on this?

Kevin Li: Absolutely. You're raising some really important questions here. And I, if I'm not mistaken, it was quite shocking to hear when I was just in Jakarta last week that Indonesia is deindustrializing. And it was shocking in the sense because to me, looking at the map of Southeast Asia, you see that Indonesia is the most naturally well-endowed and demographically gifted at this current point. You have the demographic dividend, you have that large market, you have that middle class, yet Indonesia is deindustrialization. 

So, I think what I would, if I can be prescriptive, I would say first, Indonesia should do what any other emerging market should do- is to compete with credibility, right? Is to create that sort of investment, business environment that attracts high-quality long-term investment into the countries. And there, you're competing against your neighbors to a certain degree. You're competing against other Southeast Asian countries, you're competing against perhaps Latin America, sometimes Africa or South Asia. But I think what we're trying to get to, is how do you create value that stays in Indonesia, that doesn't get entirely captured by foreign investors. And I think this is what I would suggest, you know, consider what your leverages are, right? 

Indonesia has had, you can say, from a value creating perspective, a relatively successful downstreaming policy. How can you push for further ESG accountability so that you're also paying attention to the externalities, the positive externalities, the environmental and the social impact, the human capital development, right? How can you also while you're inviting perhaps companies to come build electric vehicles in Indonesia, can you also get them to help upgrade the grid, the existing electricity grid in Indonesia? So, I think what the question here, particularly as relevant to tech transfer, is is not like a yes or no question. It's not if a company like BYD is going to say yes versus, no, it's not like getting them to turn from saying no to yes, but it's actually a very decade-long process.  

Because when China was in the 1990s, when Japan was in the 1960s, they all went through the process of having FDI come in, they all had this decade-long journey of Western firms or Taiwanese firms flying engineers into the country to train, to develop the locals. And first, they gain that manufacturing knowledge, they learn how to operationalize things, they learn how to run factories, and then when they start, they get trusted enough to do R&D, right? So, now you have Tesla doing R&D in China, you have, you know, companies doing R&Ds in Japan, but it takes time, right? And I was also quite surprised to hear that 88% of Indonesia's working-age population does not have a tertiary education. 

And I think it's really important that we're able to target upskilling for for these population because if they're not, if they're not going to college, there has to be vocational schools, there has to be apprenticeship opportunities, training centers co-funded by private sector to to help them get that upskilling opportunity. So, I think if Indonesia is serious about becoming that innovation hub that it has the potential to become, then starting today, we have to invest in education. And I think there's plenty of ways to be able to do that with the amount of investments that are flowing into Indonesia.

Noto: Yes, I think I echoed your statement. I think in the medium and long term of the relationship with China, especially in developing our downstreaming industry, we need to make sure that the industry that we built with China also builds more surrounding economic drivers, right? Especially when it comes to the local region, right? What are the benefits of the surrounding industries?, whether it's on, I don't know, basically the extension of what you said as a local value creation, right? So, we also need to develop our R&D, for example. 

We also need to push our local industries to compete and to see how we can also learn from how China has done in Indonesia. So, I think that's a very good point and I hope that the government also listens to this and see how the improvement can be made in the near future. Yes and I also want to touch a bit on sustainability, Kevin, because you touched a bit on ESG accountability. I know China has tried to improve the global narratives on the BRI, right? So, they also put the element of, is it called Green BRI or what is it called?

Kevin Li: Yeah, it's called Greening the Belt and Road Initiative project, I believe.

Noto: Right. So, how does that happen in Indonesia? What do you see? Is it improving? Is it, do they really put the ESG accountability in place or what is your observation?

Kevin Li: I think that statement must have come out in either 2021 or early 2022 and I think it captured a significant amount of international attention. I think in terms of actually enforcing or say observations from on the ground, my understanding is that China continued to build captive coal power plants for industries within Indonesia, for industries where they've also invested in, such as in these industrial parks, on the island of Sulawesi, for example. 

My understanding here is I've and I've consulted including with yourself, Noto, as well. I remember this is, we've tried to understand who should be acting here to address the environmental, social, and governance issue. Like, who should begin acting? Because every party has a role in contributing to where we are today in terms of these environmental safety, community displacement, biodiversity loss, and other issues on top. And I've come to the conclusion, and this, you know, let's talk about it if you disagree, but it's the Indonesian government's role. 

Yeah. To set stricter ESG regulations. And I think with those rules in place, it requires foreign investors who are participating in business activities in Indonesia to meet those requirements. But why is it not happening? Right? And I think what's missing there is incentives, right? So, local governments depend on revenue coming from these critical mineral processing and thus, when you do something like that, the enforcement can get compromised because both sides, actually private Chinese, private companies and the local governments probably have a shared understanding of prioritizing speed, scale, output, and production. 

Sustainability is not going to be on top of their agenda. So, I think in order to make sustainability top of their agenda, you need to rebalance these incentives. You need not just to pass new laws if you're not going to follow up, but actually means creating incentives such as actually making the cost of breaking the rules very expensive, right? Penalizing offenders. You are also going to be encouraged if you're allowing for say faster permitting, right? If you abide by ESG rules, green finance, ability to attract additional amounts of finance and be certified up to international standards, or even say like getting preferential access to certain things such as allocation in industrial parks. Right? 

So, I think when you make it incentivized, then the local government, then the Chinese private sector players is not just going to be thinking about compliance as a checkbox. In fact, they might actually help set the rules. Right? And Indonesia, if raising that standard, can then get on a positive loop of attracting even higher quality capital. So, I think then that kind of snowball starts to roll. Right? But I think you need to align the initial incentives for it to happen.

Noto: That's a very important note. I think the approach of giving regulatory and practical incentives, right? For those who have been involved in this ecosystem, it is a very important thing to do, right? To make sure that the review on how we deal with China is actually involving inclusively all parts of the communities, including the local government, and even civil society, right? To look into how we can assess the dynamics of our relationship. 

And I like to use this opportunity also to call for , you know, our agencies that are involved in investment because investment is not only a matter of attracting, right? the foreign capital or FDI to Indonesia. That's why I think for years, not for a long time, but I've been calling for Indonesia to have an investment review board to really look into the externalities, right? To really assess what are the aftermath risks when the capital is coming, right? Whether it's on political, geopolitical risk, meaning that we also need to balance with other foreign partners, whether it's socioeconomic risk, whether it's environmental risk, right? As the thing that we just discussed. So let's see and and hopefully we can do more to really make it happen, right? Kevin. And it's not only for China, right? It's actually for all the partners that we have as Indonesia.  

My last question, Kevin, if I may. I heard China, I mean the Chinese party is going to do, I mean going to have a congress and they'll start to develop the future plan, right? Of the Chinese economic policies, I think it's not only economic, right? It's beyond that. So, tell us about it and why do we need to really put attention on this?

Kevin Li: You're speaking to me at a very relevant time. We are actually right during the week of what's called the plenum, the 14th plenum which allows Chinese policymakers, decision-makers to debate and agree on the next five-year plan for the country. And that plan is going to involve detailing what the planning, the operationalization, the investments of China into everything from its focus around manufacturing to addressing issues such as poverty or to advance agendas such as common prosperity or what not. 

And I think it's important for listeners of this podcast to pay attention to that because understanding China as a planned economy is the most important aspect of understanding China. If China sets out a goal to say achieve a certain amount of gigawatt renewable energy power capacity generation by a certain year, then China has full confidence to put that out on paper and aim and and have the sort of full support to be able to achieve these goals. 

And I think this year, this plan coming out is particularly important because of the amount of attention that's going to be focused on innovation, that's going to be focused on clean energy and China's domestic geopolitical, economic consideration of climate and clean energy and the race to gaining higher grounds on batteries will be super important for a country like Indonesia, where it plays a tremendous role in supplying necessary amount of critical minerals that goes into batteries, that goes into turbines, but also as a market when China is able to create the next generation of batteries or electric vehicles at both quality and and and cheaper price, that is not only going to present a challenge for Indonesian producers here.

I'm thinking the South Korean and Japanese auto manufacturers here in terms of competition in this market, but also for Indonesia to consider how to further attract investments from China to localize manufacturing, to bring that knowledge and bring that innovation here into Indonesia and allow Indonesia to complete what it sets out to do, which is to grow sort of its own full cycle clean energy, if not electric vehicle slash battery value chain. So, I think that's why attention to this week could be very important because that is going to be very clearly laid out in words and in documents that are coming out actually at the end of this week.

Noto: Wow. So, this meeting of the Chinese political leadership is very important for Indonesia then. It will affect our industrial cooperation with them, too.

Kevin Li: I would agree. Absolutely.

Noto: Great. So, thank you so much, Kevin. It's been very insightful talking to you. And hopefully we can have some time again to discuss other things.

Kevin Li: Let's do that. I would just like to close perhaps on a slightly more positive note if you have two minutes, Noto. I think having researched and looked at this relationship between China and Indonesia, sometimes looking at China and Global South countries, what we're starting to realize is there's a lot of governmental G-to-G or business B-to-B, you know, activities going on, warming, you could say. 

But if you go down to the people and you ask what people in China know about Indonesia, they're going to say Bali, right? If you go to Indonesia and you ask, you know, the same question, they're not going to say, "I've been there a few times. I know China very well," right? But that relationship is very different when it comes to Japan and Indonesia, when it comes to Singapore and the US. So, I think what's important here also to recognize is human understanding.  

I think it's really important to understand and find that common language, especially between countries that are having this increasingly important and intricate relationship, but without necessarily the language, the history, the cultural understanding to grow trust. And I think it would be remiss if we didn't stress that as an important point to invest in relationships such as us having this conversation to build partnerships over time. 

And, you know, coming from a US think tank, I think it's also super important for the US to be able to send delegations and see more aspects of Southeast Asia. And I think the China side is starting to send a lot of delegations to Southeast Asia. They're recognizing the importance of understanding Southeast Asia and Indonesia. And I think it requires I think a collective understanding that is so important, that investments are in sort of human connections and human understanding.

Noto: Wow, that's a very powerful closing note and I totally agree with you. I think the people-to-people confidence and trust is actually the ones that make the relationship sustain, right? between the two countries. And I think it's not only happened to Indonesia-China, I think it's also a matter for all the countries' relationship in the world. And that's a very important reminder, Kevin. And whatever happens, we will still be loving Chinese food anyway.

Kevin Li: Right, it's wonderful speaking to you, Noto.

Noto: Sure. And hope we can host you also for Chinese lunch next time.

Kevin Li: That's wonderful. Yes.

Noto: Thank you. Thank you all listeners and we'll see you on the Not to Judge podcast next time. Bye-bye.