Growing Chinese investment could erode Indonesia's free and active foreign policy: Report

New Delhi, Sep 5 (AHN) Indonesia's long-standing commitment to an independent and non-aligned foreign policy is coming under increasing pressure as China's economic influence deepens across critical sectors of the Southeast Asian nation's economy, according to a report.

As per analysis by The Diplomat, Jakarta continues to uphold its free and active foreign policy doctrine, growing reliance on Chinese investment, technology and industrial partnerships could gradually limit its strategic flexibility.

Indonesia -- Southeast Asia's largest economy and the only ASEAN member in the G20 -- has emerged as a key battleground for influence between China and its competitors, including the United States, Japan and South Korea, it added.

Indonesia has shifted more significantly toward China than any other major ASEAN country over the past three decades, largely due to economic factors.

Chinese companies have expanded their presence across Indonesia's electric vehicle (EV), nickel processing, telecommunications and renewable energy sectors.

The report highlights the EV industry as a prime example with Chinese firms establishing positions across the entire value chain from nickel extraction and battery production to vehicle manufacturing and retail sales.

Brands such as BYD have rapidly gained market share in Indonesia's growing EV market, while Chinese investors have become dominant players in the country's nickel processing industry which is critical to global battery supply chains.

The report also points to China's growing role in Indonesia's telecommunications infrastructure noting that equipment from Chinese firms is widely used in the country's 5G network rollout.

While Indonesia continues to maintain broad security ties with the United States, Japan and Australia through military exercises and defence cooperation agreements, the report says economic dependence on China is increasing more rapidly than security ties.

China is benefiting from its ability to deliver large-scale investment, technology transfer and industrial development aligned with Jakarta's economic priorities, potentially narrowing Indonesia's range of strategic options and increasing Beijing's influence over Southeast Asia's largest nation, according to the report.