Formal Sino-Indonesian diplomatic relations were established on 13 April 1950. They were built on mercantile ties that had existed for centuries past and had witnessed ethnic Chinese traders and fishermen settle in various parts of Indonesia. The relationship between ethnic Indonesians (the “pribumi”) and the Chinese settlers in Indonesia was, however, one fraught with underlying tensions. It was predicated to a significant degree on a healthy dose of envy on the part of the Indonesians who perceived the Chinese as being wealthier than Indonesians in their own land.
That resentment has spilled over into bloody violence on occasion, most notably in 1965, when anti-communist violence soon became conflated with anti-Chinese sentiment and led to at least several hundred thousand deaths. China consequently suspended its ties to Indonesia on 30 October 1967. No matter that the relationship began to be re-established in the 1980s, the underlying tensions remain; ethnic Chinese are still viewed with suspicion, albeit not to the same degree as in 1965. China’s aggressive approach towards South-East Asia, additionally, has not helped that situation.
The Sino-Indonesian relationship is a complicated one.
It is ostensibly built on economic and mutually-beneficial foundations.
Economic factors such as illegal fishing by Chinese boats in Indonesian waters and a sceptical perception of Chinese business organisations by Indonesians are a drawback.
Ethnic tensions in China and Indonesia add to the tensions.