(Bloomberg) -- Indonesian President Prabowo Subianto is set to meet his Chinese counterpart Xi Jinping on Friday before heading to the US for a possible meeting with President-elect Donald Trump, balancing relations with the world’s two biggest economies in his first overseas trip.
The Beijing meeting with Xi will start the first foreign trip since the former general was inaugurated on Oct. 20, with his two-week itinerary including the APEC summit in Peru, the Group of 20 meeting in Brazil and an official visit to the UK.
“This invitation shows that Indonesia is respected” and that governments and multilateral organizations are awaiting Indonesia’s position on economic and geopolitical issues at a time marred by tension, Prabowo said on Friday before his departure from Jakarta. “We will maintain good relations with all parties.”
According to Vedi Hadiz, director of the Asia Institute at the University of Melbourne, the president will seek to ensure that the US still sees Indonesia as a major geopolitical ally, even as he continues to seek closer economic ties with China.
“Prabowo has plans to shore up Indonesia’s military and the main source of arms and other defense equipment would be the US/the West but China is crucial to him for its willingness to invest in infrastructure and industrial downstreaming projects,” Hadiz said.
During his two-week trip, Indonesia will seek mutually beneficial cooperation in the areas of trade, clean energy and maritime affairs, State Secretary Prasetyo Hadi said in a separate statement.
China, which was also Prabowo’s first foreign destination as president-elect in April, is a priority as Indonesia’s biggest trading partner and the source of more than $7 billion of investment in commodity processing capacity and infrastructure.
“Prabowo sees that China through the BRICS will emerge as a superpower,” said Wasisto Raharjo Jati, a researcher at the government’s National Research and Innovation Agency. Despite the South China Sea disputes, China will remain one of the biggest investors in Indonesia, he said.
Just days after Prabowo became leader, Indonesia began the process to join the BRICS grouping that includes Brazil, Russia, India, China and South Africa. Prabowo, who as defense minister met with foreign leaders including Russia’s Vladimir Putin, has repeatedly emphasized Indonesia’s non-aligned foreign policy of building economic ties with everyone as long as it’s in his nation’s interests.
Prabowo will be in Beijing until Sunday before heading to the US to meet President Joe Biden and, possibly, his successor Trump.
“The schedule for the visit to the US includes a meeting with the current president, but we will see how things develop,” the head of the president’s communications office Hasan Nasbi said in a statement on Wednesday before Trump’s victory in the Nov. 5 election. “It may be possible to meet with the winner of the US election.”
Trump’s return to the White House has global leaders assessing how his policies will affect their economies. The surge in the dollar that followed his election has rocked financial markets, and Indonesia is among countries that have said they may act to stabilize their currencies.
Indonesia may in fact benefit if Trump follows up on a pledge to hike tariffs on Chinese goods, according to the Employers’ Association of Indonesia, which has said companies may shift production to Southeast Asia’s biggest economy.
Still, Prabowo’s trip comes amid rising tensions over the South China Sea, where a Chinese coast guard vessel recently repeatedly entered the gas-rich waters around the Natuna islands which Indonesia claims as part of its exclusive economic zone.
Prabowo’s “friends-with-all” strategy may be challenged in the US, though, if the Trump administration pressures Indonesia to take a clearer position on Beijing’s regional ambitions.
Another wrinkle is Indonesia’s recent ban on iPhones made by Apple Inc. and Pixel devices from Alphabet Inc.’s Google, which the government says fail to meet domestic content requirements. In response, Apple has offered to increase investment in the country.
(Updates with comments from Prabowo, state secretary and analyst in third to sixth paragraphs.)
©2024 Bloomberg L.P.