Asian AngleAs belt and road investments flow into Indonesia, Chinese firms must learn to navigate culture shock

The Indonesian business operating environment is vastly different from China’s rigidly hierarchical one

Mainland investors, especially those looking to tap into Indonesia’s 269-million-strong consumer market, must overcome cultural differences to succeed in the country

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Chinese President Xi Jinping and Indonesia’s President Joko Widodo. Photo: AFP

Published: 1:00pm, 3 May 2019Updated: 1:04pm, 3 May 2019

Indonesia was an enthusiastic participant at the second Belt and Road Forum held recently in Beijing. Although Indonesian President Joko Widodo did not attend the event, he sent a high-level delegation led by vice-president Jusuf Kalla to the summit, where more than 20 agreements were signed on the sidelines.

Having survived smear campaigns alleging he is selling out the country by soliciting Chinese investments, the president, popularly known as Jokowi, is likely to secure a second term when the final results for the country’s April 17 election are released. He is expected to continue seeking Chinese investments to develop infrastructure in the sprawling archipelago.

However, Chinese investors have found that despite having support from the top levels of the Indonesian government, investing in the Southeast Asian nation is not at all straightforward.

One major obstacle is ingrained anti-Chinese sentiment in the country, a legacy from an attempted coup in 1965 that is not likely to go away any time soon. That event – blamed on the Indonesian Communist Party, which was allegedly backed by the Chinese Communist Party – sparked a communist witch-hunt in Indonesia that left an estimated 500,000 people dead in 1965-66.

The anti-Chinese sentiment still lingers in parts of Indonesian society. In the recent election campaign, many Indonesians believed in fake news stories circulated accusing Jokowi of being a communist due to his perceived closeness with Beijing

In his first term, Jokowi had attempted to rehabilitate those who had become victims during the communist purge in the spirit of bringing about national reconciliation, but had to call it off due to persistent opposition.

The groups that bear the strongest anti-communist and anti-Chinese sentiments are the military and conservative Muslims, with the former blaming communists for slaughtering its top generals in 1965, and the latter being intolerant of the atheism of communists.