The future of cooperation between China and Indonesia

The future of cooperation between China and Indonesia

Natalia Soebagjo, Shanghai

Tong Djoe must feel quite honored that Susilo Bambang Yudhoyono,
our President, has asked for his help in opening the door to
mainland China's corporate community.

Hopefully, he's not also shaking his head in dismay that after
all the years since he lent a hand in paving the way to
reestablishing Indonesian-Chinese relations back in 1990, the
Indonesian government is still seeking his advice. One would have
thought that in the meantime others besides Tong Djoe would have
learned something about China.

The "bamboo curtain" has long been raised but it makes one
wonder what our people in government, in diplomatic circle, in
the private sector and even in academia have been doing in trying
to learn about the workings of the Chinese system so that the
President can be properly advised and prepared for his coming
visit to China.

China has changed beyond imagination since Indonesia resumed
diplomatic ties with the country in 1990, after being frozen
since 1966 following Indonesia's allegation that China backed the
Indonesian Communist Party's alleged coup attempt in 1965.
China's leadership has passed from Deng Xiaoping to Jiang Zemin
and now to Hu Jintao, while the next generation of leaders is
being groomed. Gone are the stiff, somber-faced senior government
and party officials, and in their place are more youthful and
articulate, seemingly more open and accommodating individuals,
such as Bo Xilai, the minister of commerce, and Hu Jintao
himself.

The corporate sector has also changed quite dramatically,
especially since Deng Xiaoping's visit to southern China in early
1992 to resuscitate China's faltering economic reforms after the
bloody 1989 demonstrations in Tiananmen. As a frail man of 88,
Deng Xiaoping went to the cities of Wuchang, Shenzhen, Zhuhai and
Shanghai to witness the economic progress made there and called
on the leadership to continue to press ahead with reforms.

He told them to be "bolder", "have the courage to experiment"
and not "act like women with bound feet". He also reminded them
that if they wanted China's "socialism to achieve superiority
over capitalism, "we should not hesitate to draw on the
achievements of all cultures and to learn from other countries,
including the developed capitalist countries". And so the Chinese
have learned, and very fast at that.

The pace of reform was quickened, loss-making state-owned
companies continued to be restructured and the growth of a local
private sector was encouraged. Negotiations for entry into the
WTO were intensified, culminating in China's 2001 ascension. Now
China is established as a full member of the global trade regime
and there is very little debate over socialism and capitalism. So
much so, outsiders joke about China's "capitalism with Chinese
characteristics" instead of "socialism with Chinese
characteristics".

China's economy has moved away from a rigid, centrally planned
economy where the state sector dominated, to a system which is
increasingly dictated by market forces. Since 1996 the number of
state-owned enterprises continuously fell while the number of
private enterprises grew. It is reported that the private sector
has grown at an average annual rate of 30 percent and that it now
accounts for about one-third of China's GDP. Twenty years ago,
the private sector produced less than 1 percent of the national
economic output.

Having said that, however, the concept of the "private sector"
in China is still at times quite confusing. Although the number
of independent, private businesspeople is growing many of the
major supposedly private companies still have links with the
state, be it at the national or the local level, either through
their management or through ownership.

Doing business with such major companies is not easy. One
needs to understand where the company stands in the industry,
know the right people to talk to and a little of their
backgrounds, and to gain their trust in order to negotiate
effectively with them. Most importantly one needs to have
credibility and something to offer because everyone is knocking
on China's door, wanting to take a slice of the market, take
advantage of the country's manufacturing skills, even to have a
share of China's investment dollars. Competition is fierce.

To succeed in China, one needs to have a fair amount of
understanding of what China is trying to achieve. Simply put, the
Chinese are trying to undertake the gradual transformation of a
socialist society whereby economic prosperity is achieved, while
maintaining social stability and the political status quo in an
increasingly open and globalized environment.

Change in China is an ongoing and very rapid process. In the
major cities such as Beijing and Shanghai, for example, change is
not only visible from the towering high-rises, shopping malls and
fleets of luxury cars, but is also palpable. Those who are able
to take advantage of the reform policies are optimistic and
confident, enthusiastic in their drive to better their lives and,
in so doing, believe that they are contributing to China's
overall development. Yet underneath all the urban glitter lies
many potentially explosive social problems which the Chinese
government is trying to anticipate and mitigate.

Susilo's visit to China next month will no doubt involve our
economic and trade ministers and a whole entourage of
businesspeople eager to take advantage of the closer trade and
economic relations between our two countries. While they narrowly
focus on the profit prospective, we should not neglect the
broader learning experience that closer relations with China has
to offer.

We need to better understand China's history, political and
social development not because we are overawed by what the
Chinese have achieved, but more because we need the knowledge to
force us to reflect upon our own strengths and failings.

We will then know what we are up against when dealing with the
mainland Chinese who are driven by a single-mindedness of purpose
to build China into an economic and political force to be
reckoned with regionally and globally. Perhaps we will then also
know why we ourselves are lacking this drive and sense of
purpose.

Natalia Soebagjo works for the Center for Chinese Studies in
Shanghai.