China and the May 1998 riots ofIndonesia exploring the issues

Daojiong Zha

Abstract This paper explores the causes for Chinarsquos change of policy fromsilence to making public demands that Indonesia do more to protect itsethnic Chinese population in the wake of the riots in Jakarta and other partsof Indonesia in May 1998 First China saw it in its own interest to mini-mize potential damages to its state-to-state ties with Indonesia allowing aslittle room as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as a respon-sible actor in the process of regional economic crisis Finally the loyalty ofthe Indonesian Chinese to China continues to be a question and China couldfurther weaken that loyalty if it contributed to the worsening of their predi-cament In short China may have wished to maximize its possible gains andminimize the potential risks through its action over the May riots

Keywords China Indonesia May riots Taiwan Sino-ASEAN relationsregional nancial crisis

Introduction

In the history of post-Second World War Sino-Indonesian relations the ethnic Chinese in Indonesia1 have been a constant source of strainDifferences between the two governments over the nationality and polit-icalndasheconomic loyalty of the ethnic Chinese in Indonesia became a majorreason for the freeze in Sino-Indonesian diplomatic relationships between

The Pacic Review Vol 13 No 4 2000 557ndash575

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Dr Daojiong Zha is an Assistant Professor in the Graduate School of International RelationsInternational University of Japan

Address Graduate School of International Relations International University of JapanYamato-machi Minami Uonuma-gun Niigata 949-7277 Japan E-mail zhaiujacjp

The Pacic ReviewISSN 0951ndash2748 printISSN 1470ndash1332 online copy 2000 Taylor amp Francis Ltd

httpwwwtandfcoukjournals

1967 and 1990 (Suryadinata 1985 1990) After 1990 China gave a farlower priority to the issue of the ethnic Chinese and instead concentratedon improving state-to-state relations with the Indonesian government

However in May 1998 as a result of the May riots in Indonesia (to bedescribed later) and the international publicity those riots attracted Chinawas faced with a foreign policy challenge On the one hand China hasfor decades claimed that lsquo[Chinese] blood is thicker than waterrsquo in itsculturalpolitical identication with ethnic Chinese groups residing over-seas including Southeast Asia (Dittmer and Kim 1993 271ndash90) On theother hand China has also been an ardent defender of its own nationalsovereignty and promoting the principle of non-interference in anotherstatersquos domestic affairs world-wide How then should China act towardsIndonesia when overseas Chinese groups were calling on it to exertpressure on the Indonesian government to more forcefully punish thoseIndonesian citizens who had caused so much misery to the ethnic Chineseduring the May riots China rst refrained from commenting on the lossof lives and properties as well as abuses the Indonesian Chinese sufferedThen in August China applied public pressure on Indonesia but unlikeTaiwan did not apply any economic sanctions What explains this changeof policy Given the fact that China made a concerted effort to cultivatea better relationship with the members of the Association for SoutheastAsian Nations (ASEAN) in the 1990s why did China choose to interferein Indonesiarsquos domestic politics after all What do Chinarsquos foreign policyactions towards Indonesia over the ethnic Chinese say about the futureof Sino-Indonesian relations in particular and Chinarsquos relations with otherASEAN member states in general

This paper explores the dynamics shaping Chinese policy towardsIndonesia in 1998 by using its handling of the May riots as a case studyIt nds that Chinese pursuit of its Indonesia policy over the issue of ethnicChinese was constrained by several factors First China did not wish toforce Jakarta to move diplomatically closer to Taiwan Second in spite ofits domestic problems Indonesia remained signicant in the evolution ofChinandashASEAN relations Third China wanted to retain its own reputa-tion as a responsible government in the Asian nancial crisis Finally Chinaon the one hand no longer holds the same appeal to the IndonesianChinese in the 1990s as it did in the 1950s and 1960s on the other handit did not want to cause unwarranted pressure on ethnic Chinese livingin Indonesia whose loyalty was questioned In short Chinarsquos change ofpolicy in August was carefully managed to keep Chinarsquos own interest inpreserving state-to-state relations with Indonesia intact

The rst section of the paper reviews Chinarsquos Indonesia policy optionsin the summer of 1998 The second section examines Chinarsquos policy change in detail The third section explores possible causes of the changeThe fourth and nal section looks into the issues that may condition future Chinese foreign policy decisions towards Indonesia over the ethnic

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Chinese issue Regional implications of Chinarsquos pursuit of its relations withIndonesia in 1998 will also be briey discussed

Chinarsquos policy options

In 1998 social unrest in Indonesia aggravated by the Asian nancial crisisescalated and peaked 15ndash18 May in Jakarta and other parts of the country(hereafter lsquoMay riotsrsquo Tripathi and Dolven 1998) As has been true in thepast Indonesiarsquos ethnic Chinese communities were rst among the victimsof random violence (Lander 1998 Vatikiotis 1998 219ndash27) The intensityof the violence coupled with the apparent incapacity of the Indonesiangovernment to restore social order drew condemnation by ethnic Chinesegroups world-wide which called on the Chinese government to exert pres-sure on the Indonesian government to seek redress China then faced atleast three policy choices to return to its policy practice of the 1950s and1960s to pressure Indonesia on the basis of human rights principles ratherthan purported ethnic afnity to continue ignoring the suffering of theIndonesian Chinese as it had been doing until August 1998 None of thesethree options was adopted for reasons explained below

First for China to heed the calls of ethnic Chinese communities wouldin effect mean a return to its Indonesia policy of the 1950s and 1960sWhen the two countries established a full diplomatic relationship in April1950 the issue of dual nationality concurrently held by most ethnic Chineseresiding in Indonesia was not treated as a major obstacle Both China andIndonesia needed each otherrsquos support to avoid being too closely tied toeither of the two superpowers that were competing for inuence in Eastand Southeast Asia (Mozingo 1976) In 1954 China changed its nation-ality law from bloodline to birthplace and gave the Chinese residing inIndonesia a choice between Chinese and Indonesian nationalities Butcompetition between the Chinese and Indonesian governments for theloyalty of the ethnic Chinese living in Indonesia continued China accusedIndonesia of systematic discrimination of its ethnic compatriots andIndonesia accused China of using the ethnic Chinese to incite domesticunrest and subvert the Indonesian government When Indonesiarsquos Chinesecame under attack in 1965 China encouraged and arranged for the evac-uation of thousands of them to move to China In 1967 Indonesia brokeoff its diplomatic relations with China (Mozingo 1976 Ramanathan 1994Suryadinata 1985)

Since the early 1980s China has worked hard to gain an external envi-ronment conducive to its domestic modernization programs To this endit gave a higher priority to securing the trust of the governments ofSoutheast Asian nations including Indonesia and repeatedly declared itspolicy of not using Southeast Asiarsquos ethnic Chinese populations for Chinarsquosown gains In Indonesia however lsquothe perception of ldquounchanged Chineserdquotheir links with China and their economic dominance [in the Indonesian

Daojiong Zha China and the May 1998 riots of Indonesia 559

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economy]rsquo continued and was one of the key factors that prevented Jakartafrom positively responding to Beijingrsquos initiatives to restore diplomaticrelations (Suryadinata 1987 137) Indeed China and Indonesia were not able to re-establish a full diplomatic relationship until August 1990According to one analysis Chinarsquos diplomatic success owed more toIndonesiarsquos domestic politics than Jakartarsquos trust of China over the ethnicChinese issue (Suryadinata 1990)

Indeed China never completely dropped the issue of ethnic Chinesefrom its overall foreign policy towards Indonesia It routinely expressedconcern when incidents of social unrest resulted in damages to lives andproperties of the Indonesian Chinese For example in April 1994 theChinese Foreign Ministry issued a statement of concern about lsquoa laborunrest that ared into an anti-Chinese riot in North Sumatrarsquo and calledon Jakarta to defuse the situation But the Indonesian government atlyrejected the basis for such Chinese pronouncements Using terminologyChina customarily adopts to discard foreign concerns over the treatmentof ethnic minorities within China Jakarta called the unrest an internalaffair (Sukma 1994 36)

On the other hand China in the 1990s no longer holds the same appeal to Indonesiarsquos ethnic Chinese population as it did in the 1950s and1960s Like other lsquoReturned Overseas Chinesersquo the ethnic Chinese who didheal Chinarsquos call to return to China from Indonesia were subjugated by thebrutalities of class struggles during the Cultural Revolution which beganalmost immediately upon their relocation to China Their loyalty to Chinawas questioned properties conscated and families were separated by theChinese government throughout China When the Cultural Revolutionended many had to struggle with the Chinese bureaucracy to emigrate fromChina (Godley 1989) Indeed prior to the May riots many IndonesianChinese chose Australia as their sanctuary (Gilley et al 1998) In the wake of the riots fewer than 200 Indonesians applied for Hong Kongpassports which are different from passports issued to Chinese nationalsdomiciled in mainland China and offer a far greater degree of conveniencein international travel (South China Morning Post 31 August 1998)

There is a more profound reason for China not to return to its Indonesiapolicy of the 1950s and 1960s over the issue of ethnic Chinese Since theearly 1980s partly because China has been successful in attracting over-seas Chinese capital the rise of China was interpreted by many inSoutheast Asia as a threat Part of the lsquoChina threatrsquo thesis postulates thatgrowing economic and cultural ties between China and the overseasChinese communities in Southeast Asia can be used by China as a polit-icalstrategic leverage against Southeast Asian states (Goodman 199798Roy 1996) The Chinese government has spared no effort in its attemptto disprove such worries For China to return to a policy of majorconfrontation with Indonesia over the issue of ethnic Chinese would onlyserve to prove the lsquoChina threatrsquo concerns to be true

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Second the May riots presented China with an opportunity in its human rights diplomacy China could potentially enhance its internationalstanding by dening the violence in Indonesia as an issue of human rightsrather than one of diplomacy based on ethnic afnity alone Such a changeof denition would signal the beginning of change in Chinarsquos attitudestowards human rights Since the early 1980s in particular the TiananmenSquare Incident of June 1989 China has been reactive to internationalcriticism of human rights violations For China to pressure Indonesia onhuman rights grounds would signal Chinarsquos willingness to integrate itselfinto the world community in the protection of human rights regardlessof where such violations take place As a matter of fact prior to beingthe target of international pressures on its own human rights practicesChina acted as a champion for human rights in the Third World It alsoused human rights arguments to protest against the oppression of over-seas Chinese in Thailand Vietnam and other Southeast Asian countries(Nathan 1994 626)

However in the case of the May riots China stayed clear from making any reference to the violation of the riot victimsrsquo human rightsThis reected the structural weakness of Chinese foreign policy in the1990s Namely as a matter of principle China would have difculty justi-fying a departure from its own position that a statersquos sovereign rights takeprecedence over individual rights Since China argues that state sover-eignty ought to be strengthened by international human rights activitieshow can it justify acting to weaken Indonesiarsquos state sovereigntyThroughout the May riots the Chinese Foreign Ministryrsquos repeated cate-gorization of the Indonesian Chinese as lsquomembers of the Indonesianfamilyrsquo serves as a case in point

Furthermore as news about the May riots began to break through theChinese governmentrsquos sanctions and reached Chinese society nationalisticsentiments started to emerge within China In Beijing university studentsbegan to hold rallies against the Indonesia government and were callingfor a strong response by the Chinese government (Vatikiotis et al 1998)In the history of Communist rule in China student nationalism has alwaysbeen a double-edged sword for the Chinese government which oftenended in violent repression by the government and therefore violation ofthe demonstratorsrsquo human rights The last thing the Chinese governmentwanted was the possibility of having to deal with another round of inten-sive international human rights pressure by allowing the emerging studentnationalism to get out of control Chinarsquos inability to take the humanrights initiative and its fear of having another human rights problem ofits own to deal with were conceivably one of the causes for its initialsilence about the plight of the Indonesian Chinese during the May riots

Third prior to the outbreak of the May riots Beijingrsquos policy report-edly lsquowas simply to hope the riots wouldnrsquot happenrsquo (Vatikiotis et al 199821)2 Indeed during his visit to Jakarta in April Chinarsquos Foreign Minister

Daojiong Zha China and the May 1998 riots of Indonesia 561

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Tang Jiaxuan categorized incidents of anti-Chinese riots throughoutIndonesia as Jakartarsquos lsquointernal affairrsquo Tang also pledged a $3 million loanto the Suharto government which was facing increasing societal pressureas a result of the worsening nancial crisis

In the days leading up to the May riots Chinese state-controlled mediafocused on the Suharto governmentrsquos efforts to regain control of thesociety in its nal days and made no reference to the burning lootingtorture and rapes that were affecting many ethnic Chinese in Jakarta Areport in the Peoplersquos Daily about the Indonesian situation on 18 May(the peak of the riots) described Suhartorsquos order to send Indonesiarsquos armedforces to patrol the streets of Jakarta a lsquosecurity measurersquo It commendedSuharto for trying to lsquorelieve the economic burden on the people broughtabout by the worsening economic situationrsquo through an order to reducegasoline and electricity prices (Renmin Ribao 18 May 1998)

China did take measures to evacuate its citizens (including Hong Kong passport holders) working and travelling in Indonesia and offeredconsular protection to Taiwan and Macao travel document holders whowould seek assistance from its diplomatic missions in Indonesia (RenminRibao 17 and 22 May 1998) The obvious distinction here is that Chinadid not appear willing to get involved with the fate of the IndonesianChinese

In short when the May riots did happen China was not in a positionto pursue either of the two extreme policy options to act strongly onbehalf of the Indonesian Chinese victims or to take the leap by applyingpressure on Indonesia on human rights grounds Instead for nearly threemonths China ignored the May riots as an incident of diplomatic concern

China changes policy over the May riots

When China changed its policy towards Indonesia over the May riots itpursued a two-pronged policy making public demands on Indonesia toredress the plight of the Indonesian Chinese who suffered during the riotsand keeping its bilateral economic interactions intact It also went aheadwith high-level meetings between the two governments This section ofthe paper recounts Chinarsquos policy change in some detail

Beginning in August through November China made a series of public pronouncements to express its displeasure with the Indonesiangovernment over the latterrsquos handling of the May riots Also in AugustChina agreed to sell 50000 tons of rice to Indonesia (Antara 6 August1998) and provided Indonesia with a $3 million grant of medicines andpharmaceuticals It also went ahead to execute a $200 million economicloan package ndash agreed in April 1998 ndash to Indonesia (Antara 15 August1998) In November a Chinese trade delegation visited Jakarta onschedule to discuss Chinese investment projects in Indonesia (The JakartaPost 26 November 1998) Apparently economic ties between the two

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countries were not affected by Chinarsquos expressed dissatisfaction with theIndonesian governmentrsquos slow progress in punishing those responsible forviolence to the Indonesian Chinese caught in the May riots

China began to apply diplomatic pressure on Indonesia on 28 July whenChinese Foreign Minister Tang Jiaxuan raised Chinarsquos concern about theplight of Indonesiarsquos ethnic Chinese minority in the May riots withIndonesian Foreign Minister Ali Atalas on the fringes of an ASEANmeeting in Manila A day later the Chinese Foreign Ministry began tomake similar demands which was going to be a regular feature in itsweekly news briengs until November Within a week the All-ChinaWomenrsquos Association a semi-ofcial organization under the Chinesegovernment issued a statement calling for the Indonesian government to protect ethnic Chinese sisters in Indonesia (Renmin Ribao 7 August1998) In late September Chinarsquos vice-premier for foreign affairs QianQichen spoke about the May riots which can be understood as a signalof Beijingrsquos impatience with the lack of progress Jakarta had made inredressing the suffering of Chinese-Indonesians (South China MorningPost 30 September 1998)

In November Chinarsquos diplomatic action culminated when PresidentJiang Zemin raised the suffering of the Indonesian Chinese in the Mayriots with Indonesian President B J Habibie at the ChinandashASEANdialogue meeting in Kuala Lumpur (Renmin Ribao 18 November 1998)Jiang further made a point by speaking to a group of Indonesian busi-ness leaders and repeated the pledge that China would lsquonever try to usepeople of Chinese origin living in Indonesia to seek political or economicgain therersquo (Xinhua English Newswire 18 November 1998) Thereafterthe issue of the May riots disappeared from Chinarsquos news media

On the surface Chinarsquos diplomatic pressure marked lsquothe rst time sincethe 1960s that Beijing had criticized a friendly country for its treatmentof ethnic Chinesersquo (Vatikiotis et al 1998 20) By studying the nuances ofChinese pronouncements we can see that China in 1998 carried out itsIndonesia policy over the issue of ethnic Chinese with care to minimizeits actual impact on the Indonesian government Of the intensive reportingin Chinarsquos government-controlled media of the May riots since earlyAugust whose focus was exclusively on the plight of the IndonesianChinese the centerpiece of those reports is a 3 August article written bya lsquoPeoplersquos Daily Commentatorrsquo3 As is customary in Chinarsquos media prac-tices that pseudonym implies that its author is actually a decision-makerhigh in the Chinese power apparatus That article set the tone for all otherreports and comments It categorizes the ethnic Chinese in Indonesia as lsquolaw-abiding members of the Indonesian societyrsquo who were lsquomakingunremitting efforts to help lift that country out of the economic predica-ment and maintain its social stabilityrsquo It avoided using such nationalisticterms as Huaqiao (overseas Chinese) or Tongbao (compatriots) Implicitin such choice of vocabulary is the idea that China decided to speak on

Daojiong Zha China and the May 1998 riots of Indonesia 563

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behalf of the Indonesian Chinese not solely because they were Chineseby origin but because they were valuable members of Indonesian societyA second key point the said article makes is that China was alreadyassisting Indonesia in the latterrsquos efforts to recover from its economiccrisis China participated in the International Monetary Fundrsquos rescueplans for Indonesia granted import credits and donated free medicalsupplies to Indonesia Here the message is that China had no desire toapply sanctions on the Indonesian government Finally the article pointsout that an lsquoappropriate and justrsquo treatment of Chinese-Indonesians is inIndonesiarsquos own interest It lsquowill help Indonesia restore its credibility inthe international community so that it can attract investment stabilize thesociety and secure an early economic recovery and developmentrsquo (RenminRibao 3 August 1998) Taken together the article seems to be aimed atjustifying the Chinese governmentrsquos apparent departure from the principleof non-interference in another statersquos internal affairs by minimizingethnicracial implications in its diplomatic pressure on Indonesia over theIndonesian Chinese

The Chinese foreign policy bureaucracy was likewise careful with its pro-nouncements A spokesman for the Chinese Foreign Ministry used the phrase Yinni Huaren which is translated in the English-languageChina Daily to mean lsquoIndonesians of Chinese descentrsquo in referring to theIndonesian Chinese Furthermore the losses and damages Indonesiarsquosethnic Chinese suffered were categorized as a lsquomisfortunersquo and an incidentto be prevented in the future (China Daily 29 July 1998) Chinarsquosambassador to Indonesia pointedly explained that because the majority of Chinese-Indonesians have acquired Indonesian citizenship the predi-cament of Chinese-Indonesians lsquofundamentally speaking is a part ofIndonesiarsquos domestic politics Its resolution must come from the Indonesiangovernment itself The Chinese government must not act as if it could bethe chef in somebody elsersquos kitchenrsquo (Lianhe Zaobao 10 September 1998)

Indonesian Foreign Minister Ali Atalas replied to Chinarsquos diplomaticpressure by stating that Jakarta would lsquonot specically replyrsquo to concernsexpressed by Beijing and Taipei over the violence directed againstIndonesian Chinese during the May riots (AFP 25 August 1998) As therecounting above shows Chinarsquos change of policy was perhaps designednot to force Indonesia into having to reply either

Understanding Chinarsquos policy change

It is not immediately clear why China rst refrained from applying publicdiplomatic pressure on Indonesia over the May riots but then changedcourse to put Indonesia on notice An obvious cause could be thatallegations of rape and torture of ethnic Chinese women by elementsassociated with the Indonesian security establishment were not publicizedinternationally until mid-July (Vatikiotis et al 1998) However China could

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have responded to such allegations by continuing to call it a part ofIndonesiarsquos internal affairs if it wanted to

The Chinese government did allow the staging of small but brief demon-strations by university students in Beijing on Indonesian IndependenceDay (17 August) in front of the Indonesian diplomatic mission (ChinaDaily 18 August 1998 South China Morning Post 16 August 1998) Butthat demonstration was not reported in the Chinese-language mediasignaling that the government did not wish to see a widespread publicoutcry faulting either the Indonesian or Chinese government or both forlack of adequate protection of ethnic Chinese in Indonesia

Tang Jiaxuanrsquos overnight stop in Hong Kong on 29 July can be viewedas a reply to demands aired in Hong Kong for China to apply sanctionson Indonesia to punish the latter for its poor handling of the May riotsparticularly alleged rapes of ethnic Chinese women While in Hong KongTang took time to reply to Hong Kong reporters by saying that lsquotheChinese government has consistently expressed strong concern and distressat the rapes of Chinese women and attacks on Chinese during theIndonesian turmoilrsquo (Reuters 29 July 1998) Before and after its transferto Chinese sovereignty Hong Kong was important in the Chinese main-landrsquos pursuit of overseas Chinese investment (Hayter and Han 1998 Sung1991) The factors that have made Hong Kong the single most importantconduit for economic interactions between the China market and the over-seas Chinese business communities (ie Hong Kongrsquos economic nanciallegal and socio-linguistic endowments) remain On the other hand givenChinarsquos sensitivity about keeping the initiatives about foreign policy-making ndash a matter of sovereignty ndash rmly in the hands of the centralgovernment Tangrsquos Hong Kong stopover was perhaps meant to be nothingmore than a symbolic gesture

The Peoplersquos Daily did carry reports of demonstrations by overseasChinese community groups in Asia and the rest of the world demandingthat both Indonesia and China address the plight of the ethnic Chinesein Indonesia only after the Chinese government had begun making theMay riots a diplomatic issue4 In the context of a revival of ties betweensuch groups and China in recent years (Liu 1998) a point can be madethat China at least endorsed those overseas rallies In other words Chinaclearly wanted its policy towards Indonesia over the May riots to benoticed by the overseas Chinese communities whose political loyalty wasa necessary component of Chinarsquos overall foreign policy

Nonetheless explanations about Chinarsquos change of policy towards theMay riots have to take account of other foreign policy considerations Areview of events in Sino-Indonesian relations in the second half of 1998tells us that Chinese diplomacy over the May riots was related to factorsthat are of greater concern to Chinarsquos self-interest These factors includeTaiwan ChinandashASEAN relations and the loyalty of the ethnic Chineseliving in Indonesia

Daojiong Zha China and the May 1998 riots of Indonesia 565

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Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

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investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

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ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

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In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

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communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

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and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

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Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

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Chinese issue Regional implications of Chinarsquos pursuit of its relations withIndonesia in 1998 will also be briey discussed

Chinarsquos policy options

In 1998 social unrest in Indonesia aggravated by the Asian nancial crisisescalated and peaked 15ndash18 May in Jakarta and other parts of the country(hereafter lsquoMay riotsrsquo Tripathi and Dolven 1998) As has been true in thepast Indonesiarsquos ethnic Chinese communities were rst among the victimsof random violence (Lander 1998 Vatikiotis 1998 219ndash27) The intensityof the violence coupled with the apparent incapacity of the Indonesiangovernment to restore social order drew condemnation by ethnic Chinesegroups world-wide which called on the Chinese government to exert pres-sure on the Indonesian government to seek redress China then faced atleast three policy choices to return to its policy practice of the 1950s and1960s to pressure Indonesia on the basis of human rights principles ratherthan purported ethnic afnity to continue ignoring the suffering of theIndonesian Chinese as it had been doing until August 1998 None of thesethree options was adopted for reasons explained below

First for China to heed the calls of ethnic Chinese communities wouldin effect mean a return to its Indonesia policy of the 1950s and 1960sWhen the two countries established a full diplomatic relationship in April1950 the issue of dual nationality concurrently held by most ethnic Chineseresiding in Indonesia was not treated as a major obstacle Both China andIndonesia needed each otherrsquos support to avoid being too closely tied toeither of the two superpowers that were competing for inuence in Eastand Southeast Asia (Mozingo 1976) In 1954 China changed its nation-ality law from bloodline to birthplace and gave the Chinese residing inIndonesia a choice between Chinese and Indonesian nationalities Butcompetition between the Chinese and Indonesian governments for theloyalty of the ethnic Chinese living in Indonesia continued China accusedIndonesia of systematic discrimination of its ethnic compatriots andIndonesia accused China of using the ethnic Chinese to incite domesticunrest and subvert the Indonesian government When Indonesiarsquos Chinesecame under attack in 1965 China encouraged and arranged for the evac-uation of thousands of them to move to China In 1967 Indonesia brokeoff its diplomatic relations with China (Mozingo 1976 Ramanathan 1994Suryadinata 1985)

Since the early 1980s China has worked hard to gain an external envi-ronment conducive to its domestic modernization programs To this endit gave a higher priority to securing the trust of the governments ofSoutheast Asian nations including Indonesia and repeatedly declared itspolicy of not using Southeast Asiarsquos ethnic Chinese populations for Chinarsquosown gains In Indonesia however lsquothe perception of ldquounchanged Chineserdquotheir links with China and their economic dominance [in the Indonesian

Daojiong Zha China and the May 1998 riots of Indonesia 559

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economy]rsquo continued and was one of the key factors that prevented Jakartafrom positively responding to Beijingrsquos initiatives to restore diplomaticrelations (Suryadinata 1987 137) Indeed China and Indonesia were not able to re-establish a full diplomatic relationship until August 1990According to one analysis Chinarsquos diplomatic success owed more toIndonesiarsquos domestic politics than Jakartarsquos trust of China over the ethnicChinese issue (Suryadinata 1990)

Indeed China never completely dropped the issue of ethnic Chinesefrom its overall foreign policy towards Indonesia It routinely expressedconcern when incidents of social unrest resulted in damages to lives andproperties of the Indonesian Chinese For example in April 1994 theChinese Foreign Ministry issued a statement of concern about lsquoa laborunrest that ared into an anti-Chinese riot in North Sumatrarsquo and calledon Jakarta to defuse the situation But the Indonesian government atlyrejected the basis for such Chinese pronouncements Using terminologyChina customarily adopts to discard foreign concerns over the treatmentof ethnic minorities within China Jakarta called the unrest an internalaffair (Sukma 1994 36)

On the other hand China in the 1990s no longer holds the same appeal to Indonesiarsquos ethnic Chinese population as it did in the 1950s and1960s Like other lsquoReturned Overseas Chinesersquo the ethnic Chinese who didheal Chinarsquos call to return to China from Indonesia were subjugated by thebrutalities of class struggles during the Cultural Revolution which beganalmost immediately upon their relocation to China Their loyalty to Chinawas questioned properties conscated and families were separated by theChinese government throughout China When the Cultural Revolutionended many had to struggle with the Chinese bureaucracy to emigrate fromChina (Godley 1989) Indeed prior to the May riots many IndonesianChinese chose Australia as their sanctuary (Gilley et al 1998) In the wake of the riots fewer than 200 Indonesians applied for Hong Kongpassports which are different from passports issued to Chinese nationalsdomiciled in mainland China and offer a far greater degree of conveniencein international travel (South China Morning Post 31 August 1998)

There is a more profound reason for China not to return to its Indonesiapolicy of the 1950s and 1960s over the issue of ethnic Chinese Since theearly 1980s partly because China has been successful in attracting over-seas Chinese capital the rise of China was interpreted by many inSoutheast Asia as a threat Part of the lsquoChina threatrsquo thesis postulates thatgrowing economic and cultural ties between China and the overseasChinese communities in Southeast Asia can be used by China as a polit-icalstrategic leverage against Southeast Asian states (Goodman 199798Roy 1996) The Chinese government has spared no effort in its attemptto disprove such worries For China to return to a policy of majorconfrontation with Indonesia over the issue of ethnic Chinese would onlyserve to prove the lsquoChina threatrsquo concerns to be true

560 The Pacic Review

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Second the May riots presented China with an opportunity in its human rights diplomacy China could potentially enhance its internationalstanding by dening the violence in Indonesia as an issue of human rightsrather than one of diplomacy based on ethnic afnity alone Such a changeof denition would signal the beginning of change in Chinarsquos attitudestowards human rights Since the early 1980s in particular the TiananmenSquare Incident of June 1989 China has been reactive to internationalcriticism of human rights violations For China to pressure Indonesia onhuman rights grounds would signal Chinarsquos willingness to integrate itselfinto the world community in the protection of human rights regardlessof where such violations take place As a matter of fact prior to beingthe target of international pressures on its own human rights practicesChina acted as a champion for human rights in the Third World It alsoused human rights arguments to protest against the oppression of over-seas Chinese in Thailand Vietnam and other Southeast Asian countries(Nathan 1994 626)

However in the case of the May riots China stayed clear from making any reference to the violation of the riot victimsrsquo human rightsThis reected the structural weakness of Chinese foreign policy in the1990s Namely as a matter of principle China would have difculty justi-fying a departure from its own position that a statersquos sovereign rights takeprecedence over individual rights Since China argues that state sover-eignty ought to be strengthened by international human rights activitieshow can it justify acting to weaken Indonesiarsquos state sovereigntyThroughout the May riots the Chinese Foreign Ministryrsquos repeated cate-gorization of the Indonesian Chinese as lsquomembers of the Indonesianfamilyrsquo serves as a case in point

Furthermore as news about the May riots began to break through theChinese governmentrsquos sanctions and reached Chinese society nationalisticsentiments started to emerge within China In Beijing university studentsbegan to hold rallies against the Indonesia government and were callingfor a strong response by the Chinese government (Vatikiotis et al 1998)In the history of Communist rule in China student nationalism has alwaysbeen a double-edged sword for the Chinese government which oftenended in violent repression by the government and therefore violation ofthe demonstratorsrsquo human rights The last thing the Chinese governmentwanted was the possibility of having to deal with another round of inten-sive international human rights pressure by allowing the emerging studentnationalism to get out of control Chinarsquos inability to take the humanrights initiative and its fear of having another human rights problem ofits own to deal with were conceivably one of the causes for its initialsilence about the plight of the Indonesian Chinese during the May riots

Third prior to the outbreak of the May riots Beijingrsquos policy report-edly lsquowas simply to hope the riots wouldnrsquot happenrsquo (Vatikiotis et al 199821)2 Indeed during his visit to Jakarta in April Chinarsquos Foreign Minister

Daojiong Zha China and the May 1998 riots of Indonesia 561

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Tang Jiaxuan categorized incidents of anti-Chinese riots throughoutIndonesia as Jakartarsquos lsquointernal affairrsquo Tang also pledged a $3 million loanto the Suharto government which was facing increasing societal pressureas a result of the worsening nancial crisis

In the days leading up to the May riots Chinese state-controlled mediafocused on the Suharto governmentrsquos efforts to regain control of thesociety in its nal days and made no reference to the burning lootingtorture and rapes that were affecting many ethnic Chinese in Jakarta Areport in the Peoplersquos Daily about the Indonesian situation on 18 May(the peak of the riots) described Suhartorsquos order to send Indonesiarsquos armedforces to patrol the streets of Jakarta a lsquosecurity measurersquo It commendedSuharto for trying to lsquorelieve the economic burden on the people broughtabout by the worsening economic situationrsquo through an order to reducegasoline and electricity prices (Renmin Ribao 18 May 1998)

China did take measures to evacuate its citizens (including Hong Kong passport holders) working and travelling in Indonesia and offeredconsular protection to Taiwan and Macao travel document holders whowould seek assistance from its diplomatic missions in Indonesia (RenminRibao 17 and 22 May 1998) The obvious distinction here is that Chinadid not appear willing to get involved with the fate of the IndonesianChinese

In short when the May riots did happen China was not in a positionto pursue either of the two extreme policy options to act strongly onbehalf of the Indonesian Chinese victims or to take the leap by applyingpressure on Indonesia on human rights grounds Instead for nearly threemonths China ignored the May riots as an incident of diplomatic concern

China changes policy over the May riots

When China changed its policy towards Indonesia over the May riots itpursued a two-pronged policy making public demands on Indonesia toredress the plight of the Indonesian Chinese who suffered during the riotsand keeping its bilateral economic interactions intact It also went aheadwith high-level meetings between the two governments This section ofthe paper recounts Chinarsquos policy change in some detail

Beginning in August through November China made a series of public pronouncements to express its displeasure with the Indonesiangovernment over the latterrsquos handling of the May riots Also in AugustChina agreed to sell 50000 tons of rice to Indonesia (Antara 6 August1998) and provided Indonesia with a $3 million grant of medicines andpharmaceuticals It also went ahead to execute a $200 million economicloan package ndash agreed in April 1998 ndash to Indonesia (Antara 15 August1998) In November a Chinese trade delegation visited Jakarta onschedule to discuss Chinese investment projects in Indonesia (The JakartaPost 26 November 1998) Apparently economic ties between the two

562 The Pacic Review

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countries were not affected by Chinarsquos expressed dissatisfaction with theIndonesian governmentrsquos slow progress in punishing those responsible forviolence to the Indonesian Chinese caught in the May riots

China began to apply diplomatic pressure on Indonesia on 28 July whenChinese Foreign Minister Tang Jiaxuan raised Chinarsquos concern about theplight of Indonesiarsquos ethnic Chinese minority in the May riots withIndonesian Foreign Minister Ali Atalas on the fringes of an ASEANmeeting in Manila A day later the Chinese Foreign Ministry began tomake similar demands which was going to be a regular feature in itsweekly news briengs until November Within a week the All-ChinaWomenrsquos Association a semi-ofcial organization under the Chinesegovernment issued a statement calling for the Indonesian government to protect ethnic Chinese sisters in Indonesia (Renmin Ribao 7 August1998) In late September Chinarsquos vice-premier for foreign affairs QianQichen spoke about the May riots which can be understood as a signalof Beijingrsquos impatience with the lack of progress Jakarta had made inredressing the suffering of Chinese-Indonesians (South China MorningPost 30 September 1998)

In November Chinarsquos diplomatic action culminated when PresidentJiang Zemin raised the suffering of the Indonesian Chinese in the Mayriots with Indonesian President B J Habibie at the ChinandashASEANdialogue meeting in Kuala Lumpur (Renmin Ribao 18 November 1998)Jiang further made a point by speaking to a group of Indonesian busi-ness leaders and repeated the pledge that China would lsquonever try to usepeople of Chinese origin living in Indonesia to seek political or economicgain therersquo (Xinhua English Newswire 18 November 1998) Thereafterthe issue of the May riots disappeared from Chinarsquos news media

On the surface Chinarsquos diplomatic pressure marked lsquothe rst time sincethe 1960s that Beijing had criticized a friendly country for its treatmentof ethnic Chinesersquo (Vatikiotis et al 1998 20) By studying the nuances ofChinese pronouncements we can see that China in 1998 carried out itsIndonesia policy over the issue of ethnic Chinese with care to minimizeits actual impact on the Indonesian government Of the intensive reportingin Chinarsquos government-controlled media of the May riots since earlyAugust whose focus was exclusively on the plight of the IndonesianChinese the centerpiece of those reports is a 3 August article written bya lsquoPeoplersquos Daily Commentatorrsquo3 As is customary in Chinarsquos media prac-tices that pseudonym implies that its author is actually a decision-makerhigh in the Chinese power apparatus That article set the tone for all otherreports and comments It categorizes the ethnic Chinese in Indonesia as lsquolaw-abiding members of the Indonesian societyrsquo who were lsquomakingunremitting efforts to help lift that country out of the economic predica-ment and maintain its social stabilityrsquo It avoided using such nationalisticterms as Huaqiao (overseas Chinese) or Tongbao (compatriots) Implicitin such choice of vocabulary is the idea that China decided to speak on

Daojiong Zha China and the May 1998 riots of Indonesia 563

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behalf of the Indonesian Chinese not solely because they were Chineseby origin but because they were valuable members of Indonesian societyA second key point the said article makes is that China was alreadyassisting Indonesia in the latterrsquos efforts to recover from its economiccrisis China participated in the International Monetary Fundrsquos rescueplans for Indonesia granted import credits and donated free medicalsupplies to Indonesia Here the message is that China had no desire toapply sanctions on the Indonesian government Finally the article pointsout that an lsquoappropriate and justrsquo treatment of Chinese-Indonesians is inIndonesiarsquos own interest It lsquowill help Indonesia restore its credibility inthe international community so that it can attract investment stabilize thesociety and secure an early economic recovery and developmentrsquo (RenminRibao 3 August 1998) Taken together the article seems to be aimed atjustifying the Chinese governmentrsquos apparent departure from the principleof non-interference in another statersquos internal affairs by minimizingethnicracial implications in its diplomatic pressure on Indonesia over theIndonesian Chinese

The Chinese foreign policy bureaucracy was likewise careful with its pro-nouncements A spokesman for the Chinese Foreign Ministry used the phrase Yinni Huaren which is translated in the English-languageChina Daily to mean lsquoIndonesians of Chinese descentrsquo in referring to theIndonesian Chinese Furthermore the losses and damages Indonesiarsquosethnic Chinese suffered were categorized as a lsquomisfortunersquo and an incidentto be prevented in the future (China Daily 29 July 1998) Chinarsquosambassador to Indonesia pointedly explained that because the majority of Chinese-Indonesians have acquired Indonesian citizenship the predi-cament of Chinese-Indonesians lsquofundamentally speaking is a part ofIndonesiarsquos domestic politics Its resolution must come from the Indonesiangovernment itself The Chinese government must not act as if it could bethe chef in somebody elsersquos kitchenrsquo (Lianhe Zaobao 10 September 1998)

Indonesian Foreign Minister Ali Atalas replied to Chinarsquos diplomaticpressure by stating that Jakarta would lsquonot specically replyrsquo to concernsexpressed by Beijing and Taipei over the violence directed againstIndonesian Chinese during the May riots (AFP 25 August 1998) As therecounting above shows Chinarsquos change of policy was perhaps designednot to force Indonesia into having to reply either

Understanding Chinarsquos policy change

It is not immediately clear why China rst refrained from applying publicdiplomatic pressure on Indonesia over the May riots but then changedcourse to put Indonesia on notice An obvious cause could be thatallegations of rape and torture of ethnic Chinese women by elementsassociated with the Indonesian security establishment were not publicizedinternationally until mid-July (Vatikiotis et al 1998) However China could

564 The Pacic Review

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have responded to such allegations by continuing to call it a part ofIndonesiarsquos internal affairs if it wanted to

The Chinese government did allow the staging of small but brief demon-strations by university students in Beijing on Indonesian IndependenceDay (17 August) in front of the Indonesian diplomatic mission (ChinaDaily 18 August 1998 South China Morning Post 16 August 1998) Butthat demonstration was not reported in the Chinese-language mediasignaling that the government did not wish to see a widespread publicoutcry faulting either the Indonesian or Chinese government or both forlack of adequate protection of ethnic Chinese in Indonesia

Tang Jiaxuanrsquos overnight stop in Hong Kong on 29 July can be viewedas a reply to demands aired in Hong Kong for China to apply sanctionson Indonesia to punish the latter for its poor handling of the May riotsparticularly alleged rapes of ethnic Chinese women While in Hong KongTang took time to reply to Hong Kong reporters by saying that lsquotheChinese government has consistently expressed strong concern and distressat the rapes of Chinese women and attacks on Chinese during theIndonesian turmoilrsquo (Reuters 29 July 1998) Before and after its transferto Chinese sovereignty Hong Kong was important in the Chinese main-landrsquos pursuit of overseas Chinese investment (Hayter and Han 1998 Sung1991) The factors that have made Hong Kong the single most importantconduit for economic interactions between the China market and the over-seas Chinese business communities (ie Hong Kongrsquos economic nanciallegal and socio-linguistic endowments) remain On the other hand givenChinarsquos sensitivity about keeping the initiatives about foreign policy-making ndash a matter of sovereignty ndash rmly in the hands of the centralgovernment Tangrsquos Hong Kong stopover was perhaps meant to be nothingmore than a symbolic gesture

The Peoplersquos Daily did carry reports of demonstrations by overseasChinese community groups in Asia and the rest of the world demandingthat both Indonesia and China address the plight of the ethnic Chinesein Indonesia only after the Chinese government had begun making theMay riots a diplomatic issue4 In the context of a revival of ties betweensuch groups and China in recent years (Liu 1998) a point can be madethat China at least endorsed those overseas rallies In other words Chinaclearly wanted its policy towards Indonesia over the May riots to benoticed by the overseas Chinese communities whose political loyalty wasa necessary component of Chinarsquos overall foreign policy

Nonetheless explanations about Chinarsquos change of policy towards theMay riots have to take account of other foreign policy considerations Areview of events in Sino-Indonesian relations in the second half of 1998tells us that Chinese diplomacy over the May riots was related to factorsthat are of greater concern to Chinarsquos self-interest These factors includeTaiwan ChinandashASEAN relations and the loyalty of the ethnic Chineseliving in Indonesia

Daojiong Zha China and the May 1998 riots of Indonesia 565

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Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

566 The Pacic Review

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investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

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ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

568 The Pacic Review

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In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

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communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

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and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

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Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

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economy]rsquo continued and was one of the key factors that prevented Jakartafrom positively responding to Beijingrsquos initiatives to restore diplomaticrelations (Suryadinata 1987 137) Indeed China and Indonesia were not able to re-establish a full diplomatic relationship until August 1990According to one analysis Chinarsquos diplomatic success owed more toIndonesiarsquos domestic politics than Jakartarsquos trust of China over the ethnicChinese issue (Suryadinata 1990)

Indeed China never completely dropped the issue of ethnic Chinesefrom its overall foreign policy towards Indonesia It routinely expressedconcern when incidents of social unrest resulted in damages to lives andproperties of the Indonesian Chinese For example in April 1994 theChinese Foreign Ministry issued a statement of concern about lsquoa laborunrest that ared into an anti-Chinese riot in North Sumatrarsquo and calledon Jakarta to defuse the situation But the Indonesian government atlyrejected the basis for such Chinese pronouncements Using terminologyChina customarily adopts to discard foreign concerns over the treatmentof ethnic minorities within China Jakarta called the unrest an internalaffair (Sukma 1994 36)

On the other hand China in the 1990s no longer holds the same appeal to Indonesiarsquos ethnic Chinese population as it did in the 1950s and1960s Like other lsquoReturned Overseas Chinesersquo the ethnic Chinese who didheal Chinarsquos call to return to China from Indonesia were subjugated by thebrutalities of class struggles during the Cultural Revolution which beganalmost immediately upon their relocation to China Their loyalty to Chinawas questioned properties conscated and families were separated by theChinese government throughout China When the Cultural Revolutionended many had to struggle with the Chinese bureaucracy to emigrate fromChina (Godley 1989) Indeed prior to the May riots many IndonesianChinese chose Australia as their sanctuary (Gilley et al 1998) In the wake of the riots fewer than 200 Indonesians applied for Hong Kongpassports which are different from passports issued to Chinese nationalsdomiciled in mainland China and offer a far greater degree of conveniencein international travel (South China Morning Post 31 August 1998)

There is a more profound reason for China not to return to its Indonesiapolicy of the 1950s and 1960s over the issue of ethnic Chinese Since theearly 1980s partly because China has been successful in attracting over-seas Chinese capital the rise of China was interpreted by many inSoutheast Asia as a threat Part of the lsquoChina threatrsquo thesis postulates thatgrowing economic and cultural ties between China and the overseasChinese communities in Southeast Asia can be used by China as a polit-icalstrategic leverage against Southeast Asian states (Goodman 199798Roy 1996) The Chinese government has spared no effort in its attemptto disprove such worries For China to return to a policy of majorconfrontation with Indonesia over the issue of ethnic Chinese would onlyserve to prove the lsquoChina threatrsquo concerns to be true

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Second the May riots presented China with an opportunity in its human rights diplomacy China could potentially enhance its internationalstanding by dening the violence in Indonesia as an issue of human rightsrather than one of diplomacy based on ethnic afnity alone Such a changeof denition would signal the beginning of change in Chinarsquos attitudestowards human rights Since the early 1980s in particular the TiananmenSquare Incident of June 1989 China has been reactive to internationalcriticism of human rights violations For China to pressure Indonesia onhuman rights grounds would signal Chinarsquos willingness to integrate itselfinto the world community in the protection of human rights regardlessof where such violations take place As a matter of fact prior to beingthe target of international pressures on its own human rights practicesChina acted as a champion for human rights in the Third World It alsoused human rights arguments to protest against the oppression of over-seas Chinese in Thailand Vietnam and other Southeast Asian countries(Nathan 1994 626)

However in the case of the May riots China stayed clear from making any reference to the violation of the riot victimsrsquo human rightsThis reected the structural weakness of Chinese foreign policy in the1990s Namely as a matter of principle China would have difculty justi-fying a departure from its own position that a statersquos sovereign rights takeprecedence over individual rights Since China argues that state sover-eignty ought to be strengthened by international human rights activitieshow can it justify acting to weaken Indonesiarsquos state sovereigntyThroughout the May riots the Chinese Foreign Ministryrsquos repeated cate-gorization of the Indonesian Chinese as lsquomembers of the Indonesianfamilyrsquo serves as a case in point

Furthermore as news about the May riots began to break through theChinese governmentrsquos sanctions and reached Chinese society nationalisticsentiments started to emerge within China In Beijing university studentsbegan to hold rallies against the Indonesia government and were callingfor a strong response by the Chinese government (Vatikiotis et al 1998)In the history of Communist rule in China student nationalism has alwaysbeen a double-edged sword for the Chinese government which oftenended in violent repression by the government and therefore violation ofthe demonstratorsrsquo human rights The last thing the Chinese governmentwanted was the possibility of having to deal with another round of inten-sive international human rights pressure by allowing the emerging studentnationalism to get out of control Chinarsquos inability to take the humanrights initiative and its fear of having another human rights problem ofits own to deal with were conceivably one of the causes for its initialsilence about the plight of the Indonesian Chinese during the May riots

Third prior to the outbreak of the May riots Beijingrsquos policy report-edly lsquowas simply to hope the riots wouldnrsquot happenrsquo (Vatikiotis et al 199821)2 Indeed during his visit to Jakarta in April Chinarsquos Foreign Minister

Daojiong Zha China and the May 1998 riots of Indonesia 561

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Tang Jiaxuan categorized incidents of anti-Chinese riots throughoutIndonesia as Jakartarsquos lsquointernal affairrsquo Tang also pledged a $3 million loanto the Suharto government which was facing increasing societal pressureas a result of the worsening nancial crisis

In the days leading up to the May riots Chinese state-controlled mediafocused on the Suharto governmentrsquos efforts to regain control of thesociety in its nal days and made no reference to the burning lootingtorture and rapes that were affecting many ethnic Chinese in Jakarta Areport in the Peoplersquos Daily about the Indonesian situation on 18 May(the peak of the riots) described Suhartorsquos order to send Indonesiarsquos armedforces to patrol the streets of Jakarta a lsquosecurity measurersquo It commendedSuharto for trying to lsquorelieve the economic burden on the people broughtabout by the worsening economic situationrsquo through an order to reducegasoline and electricity prices (Renmin Ribao 18 May 1998)

China did take measures to evacuate its citizens (including Hong Kong passport holders) working and travelling in Indonesia and offeredconsular protection to Taiwan and Macao travel document holders whowould seek assistance from its diplomatic missions in Indonesia (RenminRibao 17 and 22 May 1998) The obvious distinction here is that Chinadid not appear willing to get involved with the fate of the IndonesianChinese

In short when the May riots did happen China was not in a positionto pursue either of the two extreme policy options to act strongly onbehalf of the Indonesian Chinese victims or to take the leap by applyingpressure on Indonesia on human rights grounds Instead for nearly threemonths China ignored the May riots as an incident of diplomatic concern

China changes policy over the May riots

When China changed its policy towards Indonesia over the May riots itpursued a two-pronged policy making public demands on Indonesia toredress the plight of the Indonesian Chinese who suffered during the riotsand keeping its bilateral economic interactions intact It also went aheadwith high-level meetings between the two governments This section ofthe paper recounts Chinarsquos policy change in some detail

Beginning in August through November China made a series of public pronouncements to express its displeasure with the Indonesiangovernment over the latterrsquos handling of the May riots Also in AugustChina agreed to sell 50000 tons of rice to Indonesia (Antara 6 August1998) and provided Indonesia with a $3 million grant of medicines andpharmaceuticals It also went ahead to execute a $200 million economicloan package ndash agreed in April 1998 ndash to Indonesia (Antara 15 August1998) In November a Chinese trade delegation visited Jakarta onschedule to discuss Chinese investment projects in Indonesia (The JakartaPost 26 November 1998) Apparently economic ties between the two

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countries were not affected by Chinarsquos expressed dissatisfaction with theIndonesian governmentrsquos slow progress in punishing those responsible forviolence to the Indonesian Chinese caught in the May riots

China began to apply diplomatic pressure on Indonesia on 28 July whenChinese Foreign Minister Tang Jiaxuan raised Chinarsquos concern about theplight of Indonesiarsquos ethnic Chinese minority in the May riots withIndonesian Foreign Minister Ali Atalas on the fringes of an ASEANmeeting in Manila A day later the Chinese Foreign Ministry began tomake similar demands which was going to be a regular feature in itsweekly news briengs until November Within a week the All-ChinaWomenrsquos Association a semi-ofcial organization under the Chinesegovernment issued a statement calling for the Indonesian government to protect ethnic Chinese sisters in Indonesia (Renmin Ribao 7 August1998) In late September Chinarsquos vice-premier for foreign affairs QianQichen spoke about the May riots which can be understood as a signalof Beijingrsquos impatience with the lack of progress Jakarta had made inredressing the suffering of Chinese-Indonesians (South China MorningPost 30 September 1998)

In November Chinarsquos diplomatic action culminated when PresidentJiang Zemin raised the suffering of the Indonesian Chinese in the Mayriots with Indonesian President B J Habibie at the ChinandashASEANdialogue meeting in Kuala Lumpur (Renmin Ribao 18 November 1998)Jiang further made a point by speaking to a group of Indonesian busi-ness leaders and repeated the pledge that China would lsquonever try to usepeople of Chinese origin living in Indonesia to seek political or economicgain therersquo (Xinhua English Newswire 18 November 1998) Thereafterthe issue of the May riots disappeared from Chinarsquos news media

On the surface Chinarsquos diplomatic pressure marked lsquothe rst time sincethe 1960s that Beijing had criticized a friendly country for its treatmentof ethnic Chinesersquo (Vatikiotis et al 1998 20) By studying the nuances ofChinese pronouncements we can see that China in 1998 carried out itsIndonesia policy over the issue of ethnic Chinese with care to minimizeits actual impact on the Indonesian government Of the intensive reportingin Chinarsquos government-controlled media of the May riots since earlyAugust whose focus was exclusively on the plight of the IndonesianChinese the centerpiece of those reports is a 3 August article written bya lsquoPeoplersquos Daily Commentatorrsquo3 As is customary in Chinarsquos media prac-tices that pseudonym implies that its author is actually a decision-makerhigh in the Chinese power apparatus That article set the tone for all otherreports and comments It categorizes the ethnic Chinese in Indonesia as lsquolaw-abiding members of the Indonesian societyrsquo who were lsquomakingunremitting efforts to help lift that country out of the economic predica-ment and maintain its social stabilityrsquo It avoided using such nationalisticterms as Huaqiao (overseas Chinese) or Tongbao (compatriots) Implicitin such choice of vocabulary is the idea that China decided to speak on

Daojiong Zha China and the May 1998 riots of Indonesia 563

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behalf of the Indonesian Chinese not solely because they were Chineseby origin but because they were valuable members of Indonesian societyA second key point the said article makes is that China was alreadyassisting Indonesia in the latterrsquos efforts to recover from its economiccrisis China participated in the International Monetary Fundrsquos rescueplans for Indonesia granted import credits and donated free medicalsupplies to Indonesia Here the message is that China had no desire toapply sanctions on the Indonesian government Finally the article pointsout that an lsquoappropriate and justrsquo treatment of Chinese-Indonesians is inIndonesiarsquos own interest It lsquowill help Indonesia restore its credibility inthe international community so that it can attract investment stabilize thesociety and secure an early economic recovery and developmentrsquo (RenminRibao 3 August 1998) Taken together the article seems to be aimed atjustifying the Chinese governmentrsquos apparent departure from the principleof non-interference in another statersquos internal affairs by minimizingethnicracial implications in its diplomatic pressure on Indonesia over theIndonesian Chinese

The Chinese foreign policy bureaucracy was likewise careful with its pro-nouncements A spokesman for the Chinese Foreign Ministry used the phrase Yinni Huaren which is translated in the English-languageChina Daily to mean lsquoIndonesians of Chinese descentrsquo in referring to theIndonesian Chinese Furthermore the losses and damages Indonesiarsquosethnic Chinese suffered were categorized as a lsquomisfortunersquo and an incidentto be prevented in the future (China Daily 29 July 1998) Chinarsquosambassador to Indonesia pointedly explained that because the majority of Chinese-Indonesians have acquired Indonesian citizenship the predi-cament of Chinese-Indonesians lsquofundamentally speaking is a part ofIndonesiarsquos domestic politics Its resolution must come from the Indonesiangovernment itself The Chinese government must not act as if it could bethe chef in somebody elsersquos kitchenrsquo (Lianhe Zaobao 10 September 1998)

Indonesian Foreign Minister Ali Atalas replied to Chinarsquos diplomaticpressure by stating that Jakarta would lsquonot specically replyrsquo to concernsexpressed by Beijing and Taipei over the violence directed againstIndonesian Chinese during the May riots (AFP 25 August 1998) As therecounting above shows Chinarsquos change of policy was perhaps designednot to force Indonesia into having to reply either

Understanding Chinarsquos policy change

It is not immediately clear why China rst refrained from applying publicdiplomatic pressure on Indonesia over the May riots but then changedcourse to put Indonesia on notice An obvious cause could be thatallegations of rape and torture of ethnic Chinese women by elementsassociated with the Indonesian security establishment were not publicizedinternationally until mid-July (Vatikiotis et al 1998) However China could

564 The Pacic Review

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have responded to such allegations by continuing to call it a part ofIndonesiarsquos internal affairs if it wanted to

The Chinese government did allow the staging of small but brief demon-strations by university students in Beijing on Indonesian IndependenceDay (17 August) in front of the Indonesian diplomatic mission (ChinaDaily 18 August 1998 South China Morning Post 16 August 1998) Butthat demonstration was not reported in the Chinese-language mediasignaling that the government did not wish to see a widespread publicoutcry faulting either the Indonesian or Chinese government or both forlack of adequate protection of ethnic Chinese in Indonesia

Tang Jiaxuanrsquos overnight stop in Hong Kong on 29 July can be viewedas a reply to demands aired in Hong Kong for China to apply sanctionson Indonesia to punish the latter for its poor handling of the May riotsparticularly alleged rapes of ethnic Chinese women While in Hong KongTang took time to reply to Hong Kong reporters by saying that lsquotheChinese government has consistently expressed strong concern and distressat the rapes of Chinese women and attacks on Chinese during theIndonesian turmoilrsquo (Reuters 29 July 1998) Before and after its transferto Chinese sovereignty Hong Kong was important in the Chinese main-landrsquos pursuit of overseas Chinese investment (Hayter and Han 1998 Sung1991) The factors that have made Hong Kong the single most importantconduit for economic interactions between the China market and the over-seas Chinese business communities (ie Hong Kongrsquos economic nanciallegal and socio-linguistic endowments) remain On the other hand givenChinarsquos sensitivity about keeping the initiatives about foreign policy-making ndash a matter of sovereignty ndash rmly in the hands of the centralgovernment Tangrsquos Hong Kong stopover was perhaps meant to be nothingmore than a symbolic gesture

The Peoplersquos Daily did carry reports of demonstrations by overseasChinese community groups in Asia and the rest of the world demandingthat both Indonesia and China address the plight of the ethnic Chinesein Indonesia only after the Chinese government had begun making theMay riots a diplomatic issue4 In the context of a revival of ties betweensuch groups and China in recent years (Liu 1998) a point can be madethat China at least endorsed those overseas rallies In other words Chinaclearly wanted its policy towards Indonesia over the May riots to benoticed by the overseas Chinese communities whose political loyalty wasa necessary component of Chinarsquos overall foreign policy

Nonetheless explanations about Chinarsquos change of policy towards theMay riots have to take account of other foreign policy considerations Areview of events in Sino-Indonesian relations in the second half of 1998tells us that Chinese diplomacy over the May riots was related to factorsthat are of greater concern to Chinarsquos self-interest These factors includeTaiwan ChinandashASEAN relations and the loyalty of the ethnic Chineseliving in Indonesia

Daojiong Zha China and the May 1998 riots of Indonesia 565

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Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

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investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

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ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

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In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

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communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

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and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

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Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

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Second the May riots presented China with an opportunity in its human rights diplomacy China could potentially enhance its internationalstanding by dening the violence in Indonesia as an issue of human rightsrather than one of diplomacy based on ethnic afnity alone Such a changeof denition would signal the beginning of change in Chinarsquos attitudestowards human rights Since the early 1980s in particular the TiananmenSquare Incident of June 1989 China has been reactive to internationalcriticism of human rights violations For China to pressure Indonesia onhuman rights grounds would signal Chinarsquos willingness to integrate itselfinto the world community in the protection of human rights regardlessof where such violations take place As a matter of fact prior to beingthe target of international pressures on its own human rights practicesChina acted as a champion for human rights in the Third World It alsoused human rights arguments to protest against the oppression of over-seas Chinese in Thailand Vietnam and other Southeast Asian countries(Nathan 1994 626)

However in the case of the May riots China stayed clear from making any reference to the violation of the riot victimsrsquo human rightsThis reected the structural weakness of Chinese foreign policy in the1990s Namely as a matter of principle China would have difculty justi-fying a departure from its own position that a statersquos sovereign rights takeprecedence over individual rights Since China argues that state sover-eignty ought to be strengthened by international human rights activitieshow can it justify acting to weaken Indonesiarsquos state sovereigntyThroughout the May riots the Chinese Foreign Ministryrsquos repeated cate-gorization of the Indonesian Chinese as lsquomembers of the Indonesianfamilyrsquo serves as a case in point

Furthermore as news about the May riots began to break through theChinese governmentrsquos sanctions and reached Chinese society nationalisticsentiments started to emerge within China In Beijing university studentsbegan to hold rallies against the Indonesia government and were callingfor a strong response by the Chinese government (Vatikiotis et al 1998)In the history of Communist rule in China student nationalism has alwaysbeen a double-edged sword for the Chinese government which oftenended in violent repression by the government and therefore violation ofthe demonstratorsrsquo human rights The last thing the Chinese governmentwanted was the possibility of having to deal with another round of inten-sive international human rights pressure by allowing the emerging studentnationalism to get out of control Chinarsquos inability to take the humanrights initiative and its fear of having another human rights problem ofits own to deal with were conceivably one of the causes for its initialsilence about the plight of the Indonesian Chinese during the May riots

Third prior to the outbreak of the May riots Beijingrsquos policy report-edly lsquowas simply to hope the riots wouldnrsquot happenrsquo (Vatikiotis et al 199821)2 Indeed during his visit to Jakarta in April Chinarsquos Foreign Minister

Daojiong Zha China and the May 1998 riots of Indonesia 561

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Tang Jiaxuan categorized incidents of anti-Chinese riots throughoutIndonesia as Jakartarsquos lsquointernal affairrsquo Tang also pledged a $3 million loanto the Suharto government which was facing increasing societal pressureas a result of the worsening nancial crisis

In the days leading up to the May riots Chinese state-controlled mediafocused on the Suharto governmentrsquos efforts to regain control of thesociety in its nal days and made no reference to the burning lootingtorture and rapes that were affecting many ethnic Chinese in Jakarta Areport in the Peoplersquos Daily about the Indonesian situation on 18 May(the peak of the riots) described Suhartorsquos order to send Indonesiarsquos armedforces to patrol the streets of Jakarta a lsquosecurity measurersquo It commendedSuharto for trying to lsquorelieve the economic burden on the people broughtabout by the worsening economic situationrsquo through an order to reducegasoline and electricity prices (Renmin Ribao 18 May 1998)

China did take measures to evacuate its citizens (including Hong Kong passport holders) working and travelling in Indonesia and offeredconsular protection to Taiwan and Macao travel document holders whowould seek assistance from its diplomatic missions in Indonesia (RenminRibao 17 and 22 May 1998) The obvious distinction here is that Chinadid not appear willing to get involved with the fate of the IndonesianChinese

In short when the May riots did happen China was not in a positionto pursue either of the two extreme policy options to act strongly onbehalf of the Indonesian Chinese victims or to take the leap by applyingpressure on Indonesia on human rights grounds Instead for nearly threemonths China ignored the May riots as an incident of diplomatic concern

China changes policy over the May riots

When China changed its policy towards Indonesia over the May riots itpursued a two-pronged policy making public demands on Indonesia toredress the plight of the Indonesian Chinese who suffered during the riotsand keeping its bilateral economic interactions intact It also went aheadwith high-level meetings between the two governments This section ofthe paper recounts Chinarsquos policy change in some detail

Beginning in August through November China made a series of public pronouncements to express its displeasure with the Indonesiangovernment over the latterrsquos handling of the May riots Also in AugustChina agreed to sell 50000 tons of rice to Indonesia (Antara 6 August1998) and provided Indonesia with a $3 million grant of medicines andpharmaceuticals It also went ahead to execute a $200 million economicloan package ndash agreed in April 1998 ndash to Indonesia (Antara 15 August1998) In November a Chinese trade delegation visited Jakarta onschedule to discuss Chinese investment projects in Indonesia (The JakartaPost 26 November 1998) Apparently economic ties between the two

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countries were not affected by Chinarsquos expressed dissatisfaction with theIndonesian governmentrsquos slow progress in punishing those responsible forviolence to the Indonesian Chinese caught in the May riots

China began to apply diplomatic pressure on Indonesia on 28 July whenChinese Foreign Minister Tang Jiaxuan raised Chinarsquos concern about theplight of Indonesiarsquos ethnic Chinese minority in the May riots withIndonesian Foreign Minister Ali Atalas on the fringes of an ASEANmeeting in Manila A day later the Chinese Foreign Ministry began tomake similar demands which was going to be a regular feature in itsweekly news briengs until November Within a week the All-ChinaWomenrsquos Association a semi-ofcial organization under the Chinesegovernment issued a statement calling for the Indonesian government to protect ethnic Chinese sisters in Indonesia (Renmin Ribao 7 August1998) In late September Chinarsquos vice-premier for foreign affairs QianQichen spoke about the May riots which can be understood as a signalof Beijingrsquos impatience with the lack of progress Jakarta had made inredressing the suffering of Chinese-Indonesians (South China MorningPost 30 September 1998)

In November Chinarsquos diplomatic action culminated when PresidentJiang Zemin raised the suffering of the Indonesian Chinese in the Mayriots with Indonesian President B J Habibie at the ChinandashASEANdialogue meeting in Kuala Lumpur (Renmin Ribao 18 November 1998)Jiang further made a point by speaking to a group of Indonesian busi-ness leaders and repeated the pledge that China would lsquonever try to usepeople of Chinese origin living in Indonesia to seek political or economicgain therersquo (Xinhua English Newswire 18 November 1998) Thereafterthe issue of the May riots disappeared from Chinarsquos news media

On the surface Chinarsquos diplomatic pressure marked lsquothe rst time sincethe 1960s that Beijing had criticized a friendly country for its treatmentof ethnic Chinesersquo (Vatikiotis et al 1998 20) By studying the nuances ofChinese pronouncements we can see that China in 1998 carried out itsIndonesia policy over the issue of ethnic Chinese with care to minimizeits actual impact on the Indonesian government Of the intensive reportingin Chinarsquos government-controlled media of the May riots since earlyAugust whose focus was exclusively on the plight of the IndonesianChinese the centerpiece of those reports is a 3 August article written bya lsquoPeoplersquos Daily Commentatorrsquo3 As is customary in Chinarsquos media prac-tices that pseudonym implies that its author is actually a decision-makerhigh in the Chinese power apparatus That article set the tone for all otherreports and comments It categorizes the ethnic Chinese in Indonesia as lsquolaw-abiding members of the Indonesian societyrsquo who were lsquomakingunremitting efforts to help lift that country out of the economic predica-ment and maintain its social stabilityrsquo It avoided using such nationalisticterms as Huaqiao (overseas Chinese) or Tongbao (compatriots) Implicitin such choice of vocabulary is the idea that China decided to speak on

Daojiong Zha China and the May 1998 riots of Indonesia 563

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behalf of the Indonesian Chinese not solely because they were Chineseby origin but because they were valuable members of Indonesian societyA second key point the said article makes is that China was alreadyassisting Indonesia in the latterrsquos efforts to recover from its economiccrisis China participated in the International Monetary Fundrsquos rescueplans for Indonesia granted import credits and donated free medicalsupplies to Indonesia Here the message is that China had no desire toapply sanctions on the Indonesian government Finally the article pointsout that an lsquoappropriate and justrsquo treatment of Chinese-Indonesians is inIndonesiarsquos own interest It lsquowill help Indonesia restore its credibility inthe international community so that it can attract investment stabilize thesociety and secure an early economic recovery and developmentrsquo (RenminRibao 3 August 1998) Taken together the article seems to be aimed atjustifying the Chinese governmentrsquos apparent departure from the principleof non-interference in another statersquos internal affairs by minimizingethnicracial implications in its diplomatic pressure on Indonesia over theIndonesian Chinese

The Chinese foreign policy bureaucracy was likewise careful with its pro-nouncements A spokesman for the Chinese Foreign Ministry used the phrase Yinni Huaren which is translated in the English-languageChina Daily to mean lsquoIndonesians of Chinese descentrsquo in referring to theIndonesian Chinese Furthermore the losses and damages Indonesiarsquosethnic Chinese suffered were categorized as a lsquomisfortunersquo and an incidentto be prevented in the future (China Daily 29 July 1998) Chinarsquosambassador to Indonesia pointedly explained that because the majority of Chinese-Indonesians have acquired Indonesian citizenship the predi-cament of Chinese-Indonesians lsquofundamentally speaking is a part ofIndonesiarsquos domestic politics Its resolution must come from the Indonesiangovernment itself The Chinese government must not act as if it could bethe chef in somebody elsersquos kitchenrsquo (Lianhe Zaobao 10 September 1998)

Indonesian Foreign Minister Ali Atalas replied to Chinarsquos diplomaticpressure by stating that Jakarta would lsquonot specically replyrsquo to concernsexpressed by Beijing and Taipei over the violence directed againstIndonesian Chinese during the May riots (AFP 25 August 1998) As therecounting above shows Chinarsquos change of policy was perhaps designednot to force Indonesia into having to reply either

Understanding Chinarsquos policy change

It is not immediately clear why China rst refrained from applying publicdiplomatic pressure on Indonesia over the May riots but then changedcourse to put Indonesia on notice An obvious cause could be thatallegations of rape and torture of ethnic Chinese women by elementsassociated with the Indonesian security establishment were not publicizedinternationally until mid-July (Vatikiotis et al 1998) However China could

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have responded to such allegations by continuing to call it a part ofIndonesiarsquos internal affairs if it wanted to

The Chinese government did allow the staging of small but brief demon-strations by university students in Beijing on Indonesian IndependenceDay (17 August) in front of the Indonesian diplomatic mission (ChinaDaily 18 August 1998 South China Morning Post 16 August 1998) Butthat demonstration was not reported in the Chinese-language mediasignaling that the government did not wish to see a widespread publicoutcry faulting either the Indonesian or Chinese government or both forlack of adequate protection of ethnic Chinese in Indonesia

Tang Jiaxuanrsquos overnight stop in Hong Kong on 29 July can be viewedas a reply to demands aired in Hong Kong for China to apply sanctionson Indonesia to punish the latter for its poor handling of the May riotsparticularly alleged rapes of ethnic Chinese women While in Hong KongTang took time to reply to Hong Kong reporters by saying that lsquotheChinese government has consistently expressed strong concern and distressat the rapes of Chinese women and attacks on Chinese during theIndonesian turmoilrsquo (Reuters 29 July 1998) Before and after its transferto Chinese sovereignty Hong Kong was important in the Chinese main-landrsquos pursuit of overseas Chinese investment (Hayter and Han 1998 Sung1991) The factors that have made Hong Kong the single most importantconduit for economic interactions between the China market and the over-seas Chinese business communities (ie Hong Kongrsquos economic nanciallegal and socio-linguistic endowments) remain On the other hand givenChinarsquos sensitivity about keeping the initiatives about foreign policy-making ndash a matter of sovereignty ndash rmly in the hands of the centralgovernment Tangrsquos Hong Kong stopover was perhaps meant to be nothingmore than a symbolic gesture

The Peoplersquos Daily did carry reports of demonstrations by overseasChinese community groups in Asia and the rest of the world demandingthat both Indonesia and China address the plight of the ethnic Chinesein Indonesia only after the Chinese government had begun making theMay riots a diplomatic issue4 In the context of a revival of ties betweensuch groups and China in recent years (Liu 1998) a point can be madethat China at least endorsed those overseas rallies In other words Chinaclearly wanted its policy towards Indonesia over the May riots to benoticed by the overseas Chinese communities whose political loyalty wasa necessary component of Chinarsquos overall foreign policy

Nonetheless explanations about Chinarsquos change of policy towards theMay riots have to take account of other foreign policy considerations Areview of events in Sino-Indonesian relations in the second half of 1998tells us that Chinese diplomacy over the May riots was related to factorsthat are of greater concern to Chinarsquos self-interest These factors includeTaiwan ChinandashASEAN relations and the loyalty of the ethnic Chineseliving in Indonesia

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Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

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investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

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ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

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In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

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communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

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and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

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Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

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Tang Jiaxuan categorized incidents of anti-Chinese riots throughoutIndonesia as Jakartarsquos lsquointernal affairrsquo Tang also pledged a $3 million loanto the Suharto government which was facing increasing societal pressureas a result of the worsening nancial crisis

In the days leading up to the May riots Chinese state-controlled mediafocused on the Suharto governmentrsquos efforts to regain control of thesociety in its nal days and made no reference to the burning lootingtorture and rapes that were affecting many ethnic Chinese in Jakarta Areport in the Peoplersquos Daily about the Indonesian situation on 18 May(the peak of the riots) described Suhartorsquos order to send Indonesiarsquos armedforces to patrol the streets of Jakarta a lsquosecurity measurersquo It commendedSuharto for trying to lsquorelieve the economic burden on the people broughtabout by the worsening economic situationrsquo through an order to reducegasoline and electricity prices (Renmin Ribao 18 May 1998)

China did take measures to evacuate its citizens (including Hong Kong passport holders) working and travelling in Indonesia and offeredconsular protection to Taiwan and Macao travel document holders whowould seek assistance from its diplomatic missions in Indonesia (RenminRibao 17 and 22 May 1998) The obvious distinction here is that Chinadid not appear willing to get involved with the fate of the IndonesianChinese

In short when the May riots did happen China was not in a positionto pursue either of the two extreme policy options to act strongly onbehalf of the Indonesian Chinese victims or to take the leap by applyingpressure on Indonesia on human rights grounds Instead for nearly threemonths China ignored the May riots as an incident of diplomatic concern

China changes policy over the May riots

When China changed its policy towards Indonesia over the May riots itpursued a two-pronged policy making public demands on Indonesia toredress the plight of the Indonesian Chinese who suffered during the riotsand keeping its bilateral economic interactions intact It also went aheadwith high-level meetings between the two governments This section ofthe paper recounts Chinarsquos policy change in some detail

Beginning in August through November China made a series of public pronouncements to express its displeasure with the Indonesiangovernment over the latterrsquos handling of the May riots Also in AugustChina agreed to sell 50000 tons of rice to Indonesia (Antara 6 August1998) and provided Indonesia with a $3 million grant of medicines andpharmaceuticals It also went ahead to execute a $200 million economicloan package ndash agreed in April 1998 ndash to Indonesia (Antara 15 August1998) In November a Chinese trade delegation visited Jakarta onschedule to discuss Chinese investment projects in Indonesia (The JakartaPost 26 November 1998) Apparently economic ties between the two

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countries were not affected by Chinarsquos expressed dissatisfaction with theIndonesian governmentrsquos slow progress in punishing those responsible forviolence to the Indonesian Chinese caught in the May riots

China began to apply diplomatic pressure on Indonesia on 28 July whenChinese Foreign Minister Tang Jiaxuan raised Chinarsquos concern about theplight of Indonesiarsquos ethnic Chinese minority in the May riots withIndonesian Foreign Minister Ali Atalas on the fringes of an ASEANmeeting in Manila A day later the Chinese Foreign Ministry began tomake similar demands which was going to be a regular feature in itsweekly news briengs until November Within a week the All-ChinaWomenrsquos Association a semi-ofcial organization under the Chinesegovernment issued a statement calling for the Indonesian government to protect ethnic Chinese sisters in Indonesia (Renmin Ribao 7 August1998) In late September Chinarsquos vice-premier for foreign affairs QianQichen spoke about the May riots which can be understood as a signalof Beijingrsquos impatience with the lack of progress Jakarta had made inredressing the suffering of Chinese-Indonesians (South China MorningPost 30 September 1998)

In November Chinarsquos diplomatic action culminated when PresidentJiang Zemin raised the suffering of the Indonesian Chinese in the Mayriots with Indonesian President B J Habibie at the ChinandashASEANdialogue meeting in Kuala Lumpur (Renmin Ribao 18 November 1998)Jiang further made a point by speaking to a group of Indonesian busi-ness leaders and repeated the pledge that China would lsquonever try to usepeople of Chinese origin living in Indonesia to seek political or economicgain therersquo (Xinhua English Newswire 18 November 1998) Thereafterthe issue of the May riots disappeared from Chinarsquos news media

On the surface Chinarsquos diplomatic pressure marked lsquothe rst time sincethe 1960s that Beijing had criticized a friendly country for its treatmentof ethnic Chinesersquo (Vatikiotis et al 1998 20) By studying the nuances ofChinese pronouncements we can see that China in 1998 carried out itsIndonesia policy over the issue of ethnic Chinese with care to minimizeits actual impact on the Indonesian government Of the intensive reportingin Chinarsquos government-controlled media of the May riots since earlyAugust whose focus was exclusively on the plight of the IndonesianChinese the centerpiece of those reports is a 3 August article written bya lsquoPeoplersquos Daily Commentatorrsquo3 As is customary in Chinarsquos media prac-tices that pseudonym implies that its author is actually a decision-makerhigh in the Chinese power apparatus That article set the tone for all otherreports and comments It categorizes the ethnic Chinese in Indonesia as lsquolaw-abiding members of the Indonesian societyrsquo who were lsquomakingunremitting efforts to help lift that country out of the economic predica-ment and maintain its social stabilityrsquo It avoided using such nationalisticterms as Huaqiao (overseas Chinese) or Tongbao (compatriots) Implicitin such choice of vocabulary is the idea that China decided to speak on

Daojiong Zha China and the May 1998 riots of Indonesia 563

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behalf of the Indonesian Chinese not solely because they were Chineseby origin but because they were valuable members of Indonesian societyA second key point the said article makes is that China was alreadyassisting Indonesia in the latterrsquos efforts to recover from its economiccrisis China participated in the International Monetary Fundrsquos rescueplans for Indonesia granted import credits and donated free medicalsupplies to Indonesia Here the message is that China had no desire toapply sanctions on the Indonesian government Finally the article pointsout that an lsquoappropriate and justrsquo treatment of Chinese-Indonesians is inIndonesiarsquos own interest It lsquowill help Indonesia restore its credibility inthe international community so that it can attract investment stabilize thesociety and secure an early economic recovery and developmentrsquo (RenminRibao 3 August 1998) Taken together the article seems to be aimed atjustifying the Chinese governmentrsquos apparent departure from the principleof non-interference in another statersquos internal affairs by minimizingethnicracial implications in its diplomatic pressure on Indonesia over theIndonesian Chinese

The Chinese foreign policy bureaucracy was likewise careful with its pro-nouncements A spokesman for the Chinese Foreign Ministry used the phrase Yinni Huaren which is translated in the English-languageChina Daily to mean lsquoIndonesians of Chinese descentrsquo in referring to theIndonesian Chinese Furthermore the losses and damages Indonesiarsquosethnic Chinese suffered were categorized as a lsquomisfortunersquo and an incidentto be prevented in the future (China Daily 29 July 1998) Chinarsquosambassador to Indonesia pointedly explained that because the majority of Chinese-Indonesians have acquired Indonesian citizenship the predi-cament of Chinese-Indonesians lsquofundamentally speaking is a part ofIndonesiarsquos domestic politics Its resolution must come from the Indonesiangovernment itself The Chinese government must not act as if it could bethe chef in somebody elsersquos kitchenrsquo (Lianhe Zaobao 10 September 1998)

Indonesian Foreign Minister Ali Atalas replied to Chinarsquos diplomaticpressure by stating that Jakarta would lsquonot specically replyrsquo to concernsexpressed by Beijing and Taipei over the violence directed againstIndonesian Chinese during the May riots (AFP 25 August 1998) As therecounting above shows Chinarsquos change of policy was perhaps designednot to force Indonesia into having to reply either

Understanding Chinarsquos policy change

It is not immediately clear why China rst refrained from applying publicdiplomatic pressure on Indonesia over the May riots but then changedcourse to put Indonesia on notice An obvious cause could be thatallegations of rape and torture of ethnic Chinese women by elementsassociated with the Indonesian security establishment were not publicizedinternationally until mid-July (Vatikiotis et al 1998) However China could

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have responded to such allegations by continuing to call it a part ofIndonesiarsquos internal affairs if it wanted to

The Chinese government did allow the staging of small but brief demon-strations by university students in Beijing on Indonesian IndependenceDay (17 August) in front of the Indonesian diplomatic mission (ChinaDaily 18 August 1998 South China Morning Post 16 August 1998) Butthat demonstration was not reported in the Chinese-language mediasignaling that the government did not wish to see a widespread publicoutcry faulting either the Indonesian or Chinese government or both forlack of adequate protection of ethnic Chinese in Indonesia

Tang Jiaxuanrsquos overnight stop in Hong Kong on 29 July can be viewedas a reply to demands aired in Hong Kong for China to apply sanctionson Indonesia to punish the latter for its poor handling of the May riotsparticularly alleged rapes of ethnic Chinese women While in Hong KongTang took time to reply to Hong Kong reporters by saying that lsquotheChinese government has consistently expressed strong concern and distressat the rapes of Chinese women and attacks on Chinese during theIndonesian turmoilrsquo (Reuters 29 July 1998) Before and after its transferto Chinese sovereignty Hong Kong was important in the Chinese main-landrsquos pursuit of overseas Chinese investment (Hayter and Han 1998 Sung1991) The factors that have made Hong Kong the single most importantconduit for economic interactions between the China market and the over-seas Chinese business communities (ie Hong Kongrsquos economic nanciallegal and socio-linguistic endowments) remain On the other hand givenChinarsquos sensitivity about keeping the initiatives about foreign policy-making ndash a matter of sovereignty ndash rmly in the hands of the centralgovernment Tangrsquos Hong Kong stopover was perhaps meant to be nothingmore than a symbolic gesture

The Peoplersquos Daily did carry reports of demonstrations by overseasChinese community groups in Asia and the rest of the world demandingthat both Indonesia and China address the plight of the ethnic Chinesein Indonesia only after the Chinese government had begun making theMay riots a diplomatic issue4 In the context of a revival of ties betweensuch groups and China in recent years (Liu 1998) a point can be madethat China at least endorsed those overseas rallies In other words Chinaclearly wanted its policy towards Indonesia over the May riots to benoticed by the overseas Chinese communities whose political loyalty wasa necessary component of Chinarsquos overall foreign policy

Nonetheless explanations about Chinarsquos change of policy towards theMay riots have to take account of other foreign policy considerations Areview of events in Sino-Indonesian relations in the second half of 1998tells us that Chinese diplomacy over the May riots was related to factorsthat are of greater concern to Chinarsquos self-interest These factors includeTaiwan ChinandashASEAN relations and the loyalty of the ethnic Chineseliving in Indonesia

Daojiong Zha China and the May 1998 riots of Indonesia 565

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Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

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investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

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ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

568 The Pacic Review

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In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

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communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

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and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

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Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

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countries were not affected by Chinarsquos expressed dissatisfaction with theIndonesian governmentrsquos slow progress in punishing those responsible forviolence to the Indonesian Chinese caught in the May riots

China began to apply diplomatic pressure on Indonesia on 28 July whenChinese Foreign Minister Tang Jiaxuan raised Chinarsquos concern about theplight of Indonesiarsquos ethnic Chinese minority in the May riots withIndonesian Foreign Minister Ali Atalas on the fringes of an ASEANmeeting in Manila A day later the Chinese Foreign Ministry began tomake similar demands which was going to be a regular feature in itsweekly news briengs until November Within a week the All-ChinaWomenrsquos Association a semi-ofcial organization under the Chinesegovernment issued a statement calling for the Indonesian government to protect ethnic Chinese sisters in Indonesia (Renmin Ribao 7 August1998) In late September Chinarsquos vice-premier for foreign affairs QianQichen spoke about the May riots which can be understood as a signalof Beijingrsquos impatience with the lack of progress Jakarta had made inredressing the suffering of Chinese-Indonesians (South China MorningPost 30 September 1998)

In November Chinarsquos diplomatic action culminated when PresidentJiang Zemin raised the suffering of the Indonesian Chinese in the Mayriots with Indonesian President B J Habibie at the ChinandashASEANdialogue meeting in Kuala Lumpur (Renmin Ribao 18 November 1998)Jiang further made a point by speaking to a group of Indonesian busi-ness leaders and repeated the pledge that China would lsquonever try to usepeople of Chinese origin living in Indonesia to seek political or economicgain therersquo (Xinhua English Newswire 18 November 1998) Thereafterthe issue of the May riots disappeared from Chinarsquos news media

On the surface Chinarsquos diplomatic pressure marked lsquothe rst time sincethe 1960s that Beijing had criticized a friendly country for its treatmentof ethnic Chinesersquo (Vatikiotis et al 1998 20) By studying the nuances ofChinese pronouncements we can see that China in 1998 carried out itsIndonesia policy over the issue of ethnic Chinese with care to minimizeits actual impact on the Indonesian government Of the intensive reportingin Chinarsquos government-controlled media of the May riots since earlyAugust whose focus was exclusively on the plight of the IndonesianChinese the centerpiece of those reports is a 3 August article written bya lsquoPeoplersquos Daily Commentatorrsquo3 As is customary in Chinarsquos media prac-tices that pseudonym implies that its author is actually a decision-makerhigh in the Chinese power apparatus That article set the tone for all otherreports and comments It categorizes the ethnic Chinese in Indonesia as lsquolaw-abiding members of the Indonesian societyrsquo who were lsquomakingunremitting efforts to help lift that country out of the economic predica-ment and maintain its social stabilityrsquo It avoided using such nationalisticterms as Huaqiao (overseas Chinese) or Tongbao (compatriots) Implicitin such choice of vocabulary is the idea that China decided to speak on

Daojiong Zha China and the May 1998 riots of Indonesia 563

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behalf of the Indonesian Chinese not solely because they were Chineseby origin but because they were valuable members of Indonesian societyA second key point the said article makes is that China was alreadyassisting Indonesia in the latterrsquos efforts to recover from its economiccrisis China participated in the International Monetary Fundrsquos rescueplans for Indonesia granted import credits and donated free medicalsupplies to Indonesia Here the message is that China had no desire toapply sanctions on the Indonesian government Finally the article pointsout that an lsquoappropriate and justrsquo treatment of Chinese-Indonesians is inIndonesiarsquos own interest It lsquowill help Indonesia restore its credibility inthe international community so that it can attract investment stabilize thesociety and secure an early economic recovery and developmentrsquo (RenminRibao 3 August 1998) Taken together the article seems to be aimed atjustifying the Chinese governmentrsquos apparent departure from the principleof non-interference in another statersquos internal affairs by minimizingethnicracial implications in its diplomatic pressure on Indonesia over theIndonesian Chinese

The Chinese foreign policy bureaucracy was likewise careful with its pro-nouncements A spokesman for the Chinese Foreign Ministry used the phrase Yinni Huaren which is translated in the English-languageChina Daily to mean lsquoIndonesians of Chinese descentrsquo in referring to theIndonesian Chinese Furthermore the losses and damages Indonesiarsquosethnic Chinese suffered were categorized as a lsquomisfortunersquo and an incidentto be prevented in the future (China Daily 29 July 1998) Chinarsquosambassador to Indonesia pointedly explained that because the majority of Chinese-Indonesians have acquired Indonesian citizenship the predi-cament of Chinese-Indonesians lsquofundamentally speaking is a part ofIndonesiarsquos domestic politics Its resolution must come from the Indonesiangovernment itself The Chinese government must not act as if it could bethe chef in somebody elsersquos kitchenrsquo (Lianhe Zaobao 10 September 1998)

Indonesian Foreign Minister Ali Atalas replied to Chinarsquos diplomaticpressure by stating that Jakarta would lsquonot specically replyrsquo to concernsexpressed by Beijing and Taipei over the violence directed againstIndonesian Chinese during the May riots (AFP 25 August 1998) As therecounting above shows Chinarsquos change of policy was perhaps designednot to force Indonesia into having to reply either

Understanding Chinarsquos policy change

It is not immediately clear why China rst refrained from applying publicdiplomatic pressure on Indonesia over the May riots but then changedcourse to put Indonesia on notice An obvious cause could be thatallegations of rape and torture of ethnic Chinese women by elementsassociated with the Indonesian security establishment were not publicizedinternationally until mid-July (Vatikiotis et al 1998) However China could

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have responded to such allegations by continuing to call it a part ofIndonesiarsquos internal affairs if it wanted to

The Chinese government did allow the staging of small but brief demon-strations by university students in Beijing on Indonesian IndependenceDay (17 August) in front of the Indonesian diplomatic mission (ChinaDaily 18 August 1998 South China Morning Post 16 August 1998) Butthat demonstration was not reported in the Chinese-language mediasignaling that the government did not wish to see a widespread publicoutcry faulting either the Indonesian or Chinese government or both forlack of adequate protection of ethnic Chinese in Indonesia

Tang Jiaxuanrsquos overnight stop in Hong Kong on 29 July can be viewedas a reply to demands aired in Hong Kong for China to apply sanctionson Indonesia to punish the latter for its poor handling of the May riotsparticularly alleged rapes of ethnic Chinese women While in Hong KongTang took time to reply to Hong Kong reporters by saying that lsquotheChinese government has consistently expressed strong concern and distressat the rapes of Chinese women and attacks on Chinese during theIndonesian turmoilrsquo (Reuters 29 July 1998) Before and after its transferto Chinese sovereignty Hong Kong was important in the Chinese main-landrsquos pursuit of overseas Chinese investment (Hayter and Han 1998 Sung1991) The factors that have made Hong Kong the single most importantconduit for economic interactions between the China market and the over-seas Chinese business communities (ie Hong Kongrsquos economic nanciallegal and socio-linguistic endowments) remain On the other hand givenChinarsquos sensitivity about keeping the initiatives about foreign policy-making ndash a matter of sovereignty ndash rmly in the hands of the centralgovernment Tangrsquos Hong Kong stopover was perhaps meant to be nothingmore than a symbolic gesture

The Peoplersquos Daily did carry reports of demonstrations by overseasChinese community groups in Asia and the rest of the world demandingthat both Indonesia and China address the plight of the ethnic Chinesein Indonesia only after the Chinese government had begun making theMay riots a diplomatic issue4 In the context of a revival of ties betweensuch groups and China in recent years (Liu 1998) a point can be madethat China at least endorsed those overseas rallies In other words Chinaclearly wanted its policy towards Indonesia over the May riots to benoticed by the overseas Chinese communities whose political loyalty wasa necessary component of Chinarsquos overall foreign policy

Nonetheless explanations about Chinarsquos change of policy towards theMay riots have to take account of other foreign policy considerations Areview of events in Sino-Indonesian relations in the second half of 1998tells us that Chinese diplomacy over the May riots was related to factorsthat are of greater concern to Chinarsquos self-interest These factors includeTaiwan ChinandashASEAN relations and the loyalty of the ethnic Chineseliving in Indonesia

Daojiong Zha China and the May 1998 riots of Indonesia 565

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Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

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investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

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ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

568 The Pacic Review

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In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

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communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

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and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

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Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

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behalf of the Indonesian Chinese not solely because they were Chineseby origin but because they were valuable members of Indonesian societyA second key point the said article makes is that China was alreadyassisting Indonesia in the latterrsquos efforts to recover from its economiccrisis China participated in the International Monetary Fundrsquos rescueplans for Indonesia granted import credits and donated free medicalsupplies to Indonesia Here the message is that China had no desire toapply sanctions on the Indonesian government Finally the article pointsout that an lsquoappropriate and justrsquo treatment of Chinese-Indonesians is inIndonesiarsquos own interest It lsquowill help Indonesia restore its credibility inthe international community so that it can attract investment stabilize thesociety and secure an early economic recovery and developmentrsquo (RenminRibao 3 August 1998) Taken together the article seems to be aimed atjustifying the Chinese governmentrsquos apparent departure from the principleof non-interference in another statersquos internal affairs by minimizingethnicracial implications in its diplomatic pressure on Indonesia over theIndonesian Chinese

The Chinese foreign policy bureaucracy was likewise careful with its pro-nouncements A spokesman for the Chinese Foreign Ministry used the phrase Yinni Huaren which is translated in the English-languageChina Daily to mean lsquoIndonesians of Chinese descentrsquo in referring to theIndonesian Chinese Furthermore the losses and damages Indonesiarsquosethnic Chinese suffered were categorized as a lsquomisfortunersquo and an incidentto be prevented in the future (China Daily 29 July 1998) Chinarsquosambassador to Indonesia pointedly explained that because the majority of Chinese-Indonesians have acquired Indonesian citizenship the predi-cament of Chinese-Indonesians lsquofundamentally speaking is a part ofIndonesiarsquos domestic politics Its resolution must come from the Indonesiangovernment itself The Chinese government must not act as if it could bethe chef in somebody elsersquos kitchenrsquo (Lianhe Zaobao 10 September 1998)

Indonesian Foreign Minister Ali Atalas replied to Chinarsquos diplomaticpressure by stating that Jakarta would lsquonot specically replyrsquo to concernsexpressed by Beijing and Taipei over the violence directed againstIndonesian Chinese during the May riots (AFP 25 August 1998) As therecounting above shows Chinarsquos change of policy was perhaps designednot to force Indonesia into having to reply either

Understanding Chinarsquos policy change

It is not immediately clear why China rst refrained from applying publicdiplomatic pressure on Indonesia over the May riots but then changedcourse to put Indonesia on notice An obvious cause could be thatallegations of rape and torture of ethnic Chinese women by elementsassociated with the Indonesian security establishment were not publicizedinternationally until mid-July (Vatikiotis et al 1998) However China could

564 The Pacic Review

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have responded to such allegations by continuing to call it a part ofIndonesiarsquos internal affairs if it wanted to

The Chinese government did allow the staging of small but brief demon-strations by university students in Beijing on Indonesian IndependenceDay (17 August) in front of the Indonesian diplomatic mission (ChinaDaily 18 August 1998 South China Morning Post 16 August 1998) Butthat demonstration was not reported in the Chinese-language mediasignaling that the government did not wish to see a widespread publicoutcry faulting either the Indonesian or Chinese government or both forlack of adequate protection of ethnic Chinese in Indonesia

Tang Jiaxuanrsquos overnight stop in Hong Kong on 29 July can be viewedas a reply to demands aired in Hong Kong for China to apply sanctionson Indonesia to punish the latter for its poor handling of the May riotsparticularly alleged rapes of ethnic Chinese women While in Hong KongTang took time to reply to Hong Kong reporters by saying that lsquotheChinese government has consistently expressed strong concern and distressat the rapes of Chinese women and attacks on Chinese during theIndonesian turmoilrsquo (Reuters 29 July 1998) Before and after its transferto Chinese sovereignty Hong Kong was important in the Chinese main-landrsquos pursuit of overseas Chinese investment (Hayter and Han 1998 Sung1991) The factors that have made Hong Kong the single most importantconduit for economic interactions between the China market and the over-seas Chinese business communities (ie Hong Kongrsquos economic nanciallegal and socio-linguistic endowments) remain On the other hand givenChinarsquos sensitivity about keeping the initiatives about foreign policy-making ndash a matter of sovereignty ndash rmly in the hands of the centralgovernment Tangrsquos Hong Kong stopover was perhaps meant to be nothingmore than a symbolic gesture

The Peoplersquos Daily did carry reports of demonstrations by overseasChinese community groups in Asia and the rest of the world demandingthat both Indonesia and China address the plight of the ethnic Chinesein Indonesia only after the Chinese government had begun making theMay riots a diplomatic issue4 In the context of a revival of ties betweensuch groups and China in recent years (Liu 1998) a point can be madethat China at least endorsed those overseas rallies In other words Chinaclearly wanted its policy towards Indonesia over the May riots to benoticed by the overseas Chinese communities whose political loyalty wasa necessary component of Chinarsquos overall foreign policy

Nonetheless explanations about Chinarsquos change of policy towards theMay riots have to take account of other foreign policy considerations Areview of events in Sino-Indonesian relations in the second half of 1998tells us that Chinese diplomacy over the May riots was related to factorsthat are of greater concern to Chinarsquos self-interest These factors includeTaiwan ChinandashASEAN relations and the loyalty of the ethnic Chineseliving in Indonesia

Daojiong Zha China and the May 1998 riots of Indonesia 565

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Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

566 The Pacic Review

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investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

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ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

568 The Pacic Review

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101112131415161718192021222324252627282930313233343536373839404142434445

In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

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101112131415161718192021222324252627282930313233343536373839404142434445

and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

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101112131415161718192021222324252627282930313233343536373839404142434445

have responded to such allegations by continuing to call it a part ofIndonesiarsquos internal affairs if it wanted to

The Chinese government did allow the staging of small but brief demon-strations by university students in Beijing on Indonesian IndependenceDay (17 August) in front of the Indonesian diplomatic mission (ChinaDaily 18 August 1998 South China Morning Post 16 August 1998) Butthat demonstration was not reported in the Chinese-language mediasignaling that the government did not wish to see a widespread publicoutcry faulting either the Indonesian or Chinese government or both forlack of adequate protection of ethnic Chinese in Indonesia

Tang Jiaxuanrsquos overnight stop in Hong Kong on 29 July can be viewedas a reply to demands aired in Hong Kong for China to apply sanctionson Indonesia to punish the latter for its poor handling of the May riotsparticularly alleged rapes of ethnic Chinese women While in Hong KongTang took time to reply to Hong Kong reporters by saying that lsquotheChinese government has consistently expressed strong concern and distressat the rapes of Chinese women and attacks on Chinese during theIndonesian turmoilrsquo (Reuters 29 July 1998) Before and after its transferto Chinese sovereignty Hong Kong was important in the Chinese main-landrsquos pursuit of overseas Chinese investment (Hayter and Han 1998 Sung1991) The factors that have made Hong Kong the single most importantconduit for economic interactions between the China market and the over-seas Chinese business communities (ie Hong Kongrsquos economic nanciallegal and socio-linguistic endowments) remain On the other hand givenChinarsquos sensitivity about keeping the initiatives about foreign policy-making ndash a matter of sovereignty ndash rmly in the hands of the centralgovernment Tangrsquos Hong Kong stopover was perhaps meant to be nothingmore than a symbolic gesture

The Peoplersquos Daily did carry reports of demonstrations by overseasChinese community groups in Asia and the rest of the world demandingthat both Indonesia and China address the plight of the ethnic Chinesein Indonesia only after the Chinese government had begun making theMay riots a diplomatic issue4 In the context of a revival of ties betweensuch groups and China in recent years (Liu 1998) a point can be madethat China at least endorsed those overseas rallies In other words Chinaclearly wanted its policy towards Indonesia over the May riots to benoticed by the overseas Chinese communities whose political loyalty wasa necessary component of Chinarsquos overall foreign policy

Nonetheless explanations about Chinarsquos change of policy towards theMay riots have to take account of other foreign policy considerations Areview of events in Sino-Indonesian relations in the second half of 1998tells us that Chinese diplomacy over the May riots was related to factorsthat are of greater concern to Chinarsquos self-interest These factors includeTaiwan ChinandashASEAN relations and the loyalty of the ethnic Chineseliving in Indonesia

Daojiong Zha China and the May 1998 riots of Indonesia 565

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11303132333435363738394041424344

1145

Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

566 The Pacic Review

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101112131415161718192021222324252627282930313233343536373839404142434445

investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

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10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

568 The Pacic Review

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101112131415161718192021222324252627282930313233343536373839404142434445

In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

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11303132333435363738394041424344

1145

communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

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101112131415161718192021222324252627282930313233343536373839404142434445

and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

Indonesia in ChinandashTaiwan diplomatic rivalry inSoutheast Asia

China and Taiwan have been locked in a competition for diplomatic favorin the Southeast Asian region for decades Being the largest country withan ambition to play a leadership role in the evolution of ASEAN poli-tics (Smith 1999) Indonesia is naturally important in the ChinandashTaiwandiplomatic rivalry Along with its establishment of a full diplomaticrelationship with Indonesia (August 1990) Singapore (October 1990) andBrunei (in 1991) China completed its drive to win the pledge from allSoutheast Asian countries that they recognize China as the sole repre-sentative government of the whole of China (Taiwan included) WhereasIndonesia had never departed from pursuing a lsquoone-Chinarsquo policy in theeyes of China prior to August 1990 (Suryadinata 1990 685) Taiwansucceeded in increasing its quasi-diplomatic prole in Jakarta and otherSoutheast Asian capitals after it lost the race for diplomatic recognitionto China In the case of Indonesia the most signicant gain Taiwan madewas the February 1994 visit to Jakarta by Taiwanrsquos President Lee Teng-hui to lsquoplay golfrsquo with Suharto and his cabinet ministers (Sukma 199438ndash40) In January 1998 Taiwanrsquos Premier Vincent Siew visited Jakartaand reportedly received an audience with then President Suharto (TheJakarta Post 22 January 1998)

Since 1990 Taiwan also increased its economic presence in Indonesiaand other Southeast Asian nations as part of a deliberate policy ofnurturing a favorable destination for its offshore investments to offset thegrowing economic interdependence across the Taiwan Straits (Chan 1996Chen 1996) The Asian economic crisis forced Indonesia (and likewiseother Southeast Asian governments) to risk Chinarsquos diplomatic ire andturn to Taiwan for the much-needed capital and investment projects Asexpected Taiwan happily obliged to provide assistance (The Economist1998) Writing in the London-based Economist magazine TaiwanrsquosPremier Vincent Siew argues that were it not for Chinarsquos objection toTaiwan making monetary contributions to international and regional nan-cial institutions Southeast Asian countries would have beneted a lotmore from Taiwan (Siew 1998) The politicalndashdiplomatic implications ofTaiwanrsquos economic resilience during the Asian nancial crisis holds (Baumand Sherry 1999) and Taiwanrsquos political will to exploit them in SoutheastAsia could not have escaped notice by China

In contrast to Chinarsquos handling of the crisis Taiwan from the outsetstayed away from rhetoric that carries ethnic undertones Instead it point-edly emphasized the necessity for Indonesia to restore social order so asto create an environment for Taiwanese investments to stay The tone ofTaiwanese expressions of concern over the May riots was set on 14 MayTaiwanrsquos foreign minister asked a visiting Indonesian cabinet ofcial tohelp ensure the safety of the Taiwanese businessmen their families and

566 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

568 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

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10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

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101112131415161718192021222324252627282930313233343536373839404142434445

investments as well as the safety of Taiwanese citizens on tour inIndonesia No mention was made of the damage to the lives and prop-erties of Indonesiarsquos ethnic Chinese caused by the escalating riots (ROCForeign Ministry 1998) Like China the Taiwanese government did notuse human rights arguments in justifying its expressions of concern TheTaiwan media on the other hand was free to express outrage at the losses suffered by the ethnic Chinese in Indonesia and challenge bothTaiwan and China to do more to help Indonesiarsquos ethnic Chinese Oneprominent Taiwanese newspaper pointedly challenged Beijing to live upto its old propaganda that by helping to build a more prosperous Zuguo(ancestral land or motherland) the overseas Chinese would enjoy betterprotection in their adopted countries from Beijing (Zhongguo Shibao 29July 1998)

As allegations of atrocities against ethnic Chinese women in Jakartastarted to gain more and more media publicity Taiwanese leadersexpressed outrage but emphasized that adequate protection of Taiwaneseinvestors by Indonesia was conducive to retaining their investments inIndonesia Prominent Taiwanese business leaders also warned thatIndonesia would have to choose between paying a price for toleratingethnic violence or risking the weakening of their desire to stay when theIndonesian economy needed foreign investment most (Reuters 29 July1998) This Taiwanese strategy seemed to have paid off The Habibiegovernment reportedly proposed that ofcials from Taiwan China HongKong and the United States would be welcome to participate in investi-gating the rapes that had allegedly taken place in May (Zhongguo Shibao1 August 1998)

It was perhaps not mere coincidence that the foreign ministers of both China and Taiwan issued their respective governmentsrsquo statementsof condemnation of the May riots and their impact on Indonesian Chinese on the same day (29 July) However Taiwan unlike China hadnot started out by making treatment of Indonesiarsquos ethnic Chinese anissue of concern Instead Taiwan continued to emphasize its interest inprotecting Taiwanese citizens caught in the middle of the social unrest in Indonesia In addition Taiwan reportedly suspended plans to aidIndonesia with 20000 tons of rice to back up its displeasure with theHabibie governmentrsquos seeming indifference to the allegations of violenceagainst ethnic Chinese women in Jakarta (Reuters 20 August 1998) The message is clear the political voice of Taiwan needs to be taken seriouslyas well

Against this background it is not difcult to understand why China chose to pursue a policy of rebuke rather than sanctions when it did respond to the May riots as an issue of diplomatic concernApparently it did not want to force Indonesia to move politically closerto Taiwan

Daojiong Zha China and the May 1998 riots of Indonesia 567

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

568 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

ChinandashASEAN relations and the Asian nancial crisis

ChinandashASEAN relations are multifaceted (Cheng 1999 Grant 1993) It isnot the intention here to be comprehensive The purpose of this sectionis to help make clear the meaning of Chinese foreign policy towardsIndonesia over the May riots by putting it in the context of the Indonesianfactor in Chinarsquos pursuit of a stronger relationship with ASEAN in 1998

Post-Mao China has made improvement of relations with its SoutheastAsian neighbors one of its top foreign policy priorities (Zhao 1996 Song1998) Jiang Zeminrsquos report to the 15th National Congress of the ChineseCommunist Party held in September 1997 referred to ChinandashAsia relationsbefore it talked about relations with the worldrsquos major powers (Jiang 1997)Indeed the ASEANndashChina relationship has evolved from Cold War-eraanimosity to the formation of a web of channels for dialogues Venues fordialogue include elevation of China to a full dialogue partner of ASEANin 1995 the formation of joint ChinandashASEAN committees at ministeriallevel since 1996 and the initiation of an annual ChinandashASEAN informalsummit meeting in 1997 However viewed from ASEAN China has yetto convince its Southeast Asian neighbors that its growth in economic andmilitary strength will not translate into a return to aggressive Chinesehegemonism (Whiting 1997 Foot 1998) In 1998 among the areas for suchworries are the ongoing sovereignty disputes in the South China Sea andChinarsquos handling of the Asian nancial crisis in addition to how Chinarelates to the ethnic Chinese in Southeast Asia

Over the issue of sovereignty dispute between China and other claimantsover the South China Sea Chinarsquos assertiveness towards the Philippinesover the Mischief Reef in the Spratly Islands group offers little comfortto other ASEAN member states Although Indonesia does not claim anyof the islets in the Sino-Philippine dispute it does claim sea and seabedthat overlaps claims to sea and seabed by Vietnam Malaysia and prob-ably China and Taiwan (Storey 1999) Furthermore Indonesia has yet tobe convinced that China has completely given up its claim to theIndonesian-held Natuna Islands (Johnson 1997) Indonesia has attemptedto broker a peaceful settlement to the entire South China Sea dispute byhosting a series of informal workshops designed to explore condence-building measures In spite of its domestic difculties Indonesia wentahead with holding the 9th annual South China Sea workshop in WestJava in December 1998 (Antara 1 December 1998) The Indonesian-sponsored workshops provide a useful venue for China They allow Chinato use it to continue tabling its proposition of shelving the sovereigntydispute and conducting joint development of the South China Searesources as the means towards an eventual resolution Furthermore theIndonesian-sponsored workshops provide China with a useful excuse toargue against formation of a formal venue that could involve Taiwanrsquosparticipation as a separate political entity Currently Taiwan is representedin the workshops in a private capacity

568 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

In 1998 long-standing issues in ChinandashASEAN relations like thesovereign status of Taiwan and the South China Sea disputes were furthercomplicated by the need to overcome the regional nancial crisis (Lim1998) The crisis presented China with an opportunity to demonstrate itsresponsibility as an actor in an increasingly interdependent regionaleconomy After the economic crisis broke out in the summer of 1997China contributed to international rescue packages organized by theInternational Monetary Fund to Thailand and Indonesia This was the rst time for China since it became a member of the Fund in 1980Furthermore China pledged not to devalue the exchange rate of itscurrency the yuan and kept its pledge Because devaluation of the yuanwould have made Chinese exports more competitive on the world marketit might increase the price competitiveness of Chinese products againstsimilar ones made in Indonesia and other Southeast Asian countries Sincea drop in exports will certainly increase Indonesiarsquos difculty in copingwith its economic crisis in April 1998 then-President Suharto praisedChinarsquos currency decision by saying that it would not disrupt exports fromIndonesia and other Southeast Asian countries affected by the crisis (TheJakarta Post 23 April 1998)

Indeed it has become customary for ASEAN to note Chinarsquos contri-bution (in particular maintaining the exchange value of the yuan) incontaining the Asian economic crisis with appreciation InternationallyChinarsquos handling of the Asian nancial crisis won praise as an lsquoisland ofstabilityrsquo in Asia (Passell 1998) Against this background China could nothave applied economic sanctions on Indonesia because of its displeasureof Indonesiarsquos handling of the May riots Since the Indonesian economyin 1998 needed all the assistance it could obtain from the outside world(Sadli 1998) for China not to apply economic sanctions was not only inIndonesiarsquos interests but perhaps more importantly also conducive tomaintaining the good reputation China had already gained

Indonesian Chinese in Chinarsquos Indonesia foreign policy

As mentioned earlier in this paper China in the 1990s no longer holdsthe same appeal to the Indonesian Chinese as it did in the 1950s and1960s Why then did China choose to pursue a policy towards Indonesiabased on its propagated ethnic afnity with the Indonesian Chinese Whyindeed was it unable to live up to its promise of bringing benets to theoverseas Chinese when its power has increased as it was challenged todo

When China was diplomatically isolated by the West during the ColdWar it cultivated relations with the overseas Chinese communities forboth political loyalty (to China and against Taiwan) and nancial contri-butions to the Chinese economy (Wang 1991) Since its open-door policybegan in the early 1980s Chinarsquos focused interest in the overseas Chinese

Daojiong Zha China and the May 1998 riots of Indonesia 569

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

communities changed from making monetary remittances to China tobringing investment in China An overseas Chinese investment in Chinausually does not carry politicaldiplomatic connotations as is sometimesthe case with foreign direct investment from Western countries HoweverIndonesian Chinese invest in China lsquoprimarily for prot secondarily tosatisfy sentimental [ie national and familiar] attachments and peripher-ally to hedge against political risks in Indonesiarsquo (Waldron 1995 39) Inother words in the 1990s seen from Chinarsquos viewpoint IndonesianChinesersquos political loyalty is in question making a diplomatic risk lessworthy to take

Meanwhile Beijing can inadvertently contribute to the worsening ofIndonesiarsquos ethnic Chinesersquos predicament through measures like economicsanctions on the Indonesian government as opposed to merely expressingverbal concerns This is because diplomatic pressures from China maywork to rekindle the debate of politicalndasheconomic loyalty to whichIndonesiarsquos ethnic Chinese have to choose China or Indonesia Thisperhaps explains the Chinese Foreign Ministryrsquos refusal to comment onthe credibility of the nal report on investigations into allegations of rapes of ethnic Chinese women in May and the Indonesian governmentrsquosresponse to the report In contrast the same report drew continuingcriticism in overseas Chinese communities as inadequate In other wordseven after its change of policy in August China was unwilling to beseriously involved with the plight of those Indonesian Chinese victims inthe May riots

In hindsight China acted towards the May riots the way it did in itsown self-interest For it were the lesser-off ethnic Chinese the ones whohave less economic value to Chinarsquos drive to attract overseas Chineseinvestment who had to suffer the most in the May riots The better-offethnic Chinese the ones with a greater potential to invest in China wereable to escape the violence before it started (Gilley et al 1998 Tripathiand Dolven 1998) It would certainly not be in Chinarsquos interest to see aworsening of the Indonesian Chinesersquos predicament which would in returnfurther weaken their political loyalty however little there is left of it toChina

In short Chinarsquos change of policy towards Indonesia over the May riotsdemonstrates that Beijing was perhaps attempting to strike a balance outof a number of foreign policy objectives on top of acting to offset strongerdomestic pressures First China saw it in its own interest to minimizepotential damages to its state-to-state ties with Indonesia allowing as littleroom as possible for Taiwan to exploit in the long-lasting ChinandashTaiwandiplomatic rivalry Second Indonesia in spite of its domestic problemsremains a country of signicance to China in regional issues like the SouthChina Sea disputes Third China needed to retain its reputation as aresponsible actor in the process of regional economic crisis Finally theloyalty of the Indonesian Chinese to China continues to be a question

570 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

and China could further weaken that loyalty if it contributed to theworsening of their predicament In short China may have wished to maxi-mize its possible gains and minimize the potential risks through its actionover the May riots

Looking into the future

How well the Chinese foreign policy tactic over the May riots will workis going to take time to manifest and cannot be easily measured Shouldthere be an outbreak of social disturbance in Indonesia that results inviolence to the ethnic Chinese on a scale similar to or larger than that ofthe May riots what will Chinarsquos response be Will it take strongermeasures (ie not just diplomatic but also economic ones) againstIndonesia While it is difcult to predict the future course of Chineseforeign policy towards Indonesia a few issues are relatively clear

The political dimension of ChinandashIndonesia relations remains fragileCompetition for the Indonesian Chinesersquos loyalty between China andIndonesia is one of the issues that will continue to affect the evolution ofbilateral relations between the two countries A case in point is IndonesianPresident Habibiersquos use of the old Indonesian word Tionghoa for ethnicChinese instead of the derogatory Cina Even such a change in vocabu-lary rather than socio-economic policy was regarded as an lsquoolive branchrsquothat might pave the way for improved political relations between the twogovernments (South China Morning Post 17 August 1998) However over-seas Chinese capital made up the single largest amount of offshore invest-ment capital into the China market in the past two decades (Goodman199798) The Chinese Communist Party depends on its ability to main-tain high economic growth rates for regime survival These facts meanthat China will continue to offer both economic and cultural incentivesto the overseas Chinese populations around the world including those inIndonesia for Chinarsquos own economic interests and perhaps political loyaltyin the ChinandashTaiwan diplomatic rivalry as well Therefore China has avested interest in continuing to pursue a foreign policy that includes aheavy component of culturalpolitical identity with the overseas Chinesecommunities world-wide

In its handling of the May riots and the regional economic crisis Taiwanhas demonstrated itself to be a factor for both Indonesia and China totake seriously The continuing political stalemate between Beijing andTaipei means that Taiwan will continue to pursue its own strategic agendathat emerged in the mid-1990s Namely Taiwan shall continue to resistChinarsquos unication formula (lsquoOne Country Two Systemsrsquo) for as long aspossible and in the meantime strive to expand its own space for maneuverin global politics (Hu 1995) The July 1999 denition by TaiwanesePresident Lee Teng-huirsquos of the TaiwanndashChina relationship as a lsquospecialstate-to-statersquo one is a powerful case in point Because unication with

Daojiong Zha China and the May 1998 riots of Indonesia 571

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

Taiwan remains high on Chinarsquos foreign policy agenda China is very likelyto work hard to protect its diplomatic gains in Jakarta and other SoutheastAsian capitals This in turns provides perhaps the strongest incentive forChina not to make the predicament of ethnic Chinese in Indonesia a majordiplomatic problem in the future

The regional nancial crisis weakened Indonesiarsquos inuence in regionalaffairs for the time being However as mentioned above on sensitiveissues like the sovereignty disputes in the South China Sea Indonesia hasalso shown that it does have a role to play in Chinarsquos pursuit of betterrelations with ASEAN in the security area In an ironic way Chinarsquos prac-tice of a lsquodivide and rulersquo strategy in the South China Sea sovereigntydisputes may mean that it will work to secure Indonesiarsquos ofcial neutralitywhile it concentrates on other claimants This again can mean that Beijingwill likely treat its state-to-state relations with Jakarta with care

In conclusion Chinarsquos foreign policy towards Indonesiarsquos ethnic Chineseas its handling of the May riots shows is conditioned by issues that Chinacannot afford to overlook In particular Taiwanrsquos pursuit of relations withSoutheast Asian countries and Indonesiarsquos role in the evolution of ASEANas a regional power block to counter Chinarsquos growing inuence areexternal constraints over which China has no serious control Chinarsquosoverall national agenda in pursuing modernization and its externalconstraints do provide some assurance that China is not very likely topursue a foreign policy towards Indonesia over the issue of ethnic Chinesemore aggressively than it did in 1998

Notes1 In this paper the terms lsquoethnic Chinese in Indonesiarsquo and lsquoIndonesian Chinesersquo

are used interchangeably and without prejudice in such matters as nationalityand politicalcultural identication The term lsquooverseas Chinesersquo is used to referto ethnic Chinese who live outside China proper

2 The quotation is attributed to Zhang Yunling Director of the Institute ofSoutheast Asian Studies the Chinese Academy of Social Sciences

3 The Renmin Ribao (Peoplersquos Daily) went as far as organizing its reports onthe May riots into one of its few hyperlinks which can be read at httpwwwpeopledailycomcnynphhynhtml

4 The Renmin Ribao reported such rallies in the United States (7 and 10 August)Britain (11 August) Australia and the Philippines (19 August) South Africa(20 August) and Thailand (22 August)

ReferencesAFP (1998) lsquoProtests over anti-Chinese violence will not settle problem Atalasrsquo

25 AugustAntara (1998) lsquoAid RI negotiating rice from IDBrsquo 6 August on-linemdashmdash (1998) lsquoChina grants US$3 million in medical aidrsquo 15 August on-linemdashmdash (1998) lsquoAtalas urges claimants to work on condence building measuresrsquo 1

December

572 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

Baum Julian and Sherry Andrew (1999) lsquoThe Taiwan differencersquo Far EasternEconomic Review 162(6) 10ndash15

Chan Gerald (1996) lsquoSudpolitik the political economy of Taiwanrsquos trade andinvestment in Southeast Asiarsquo Pacic Review 9(1) 96ndash113

Chen Xiangming (1996) lsquoTaiwan investments in China and Southeast Asia ldquogowest but also go southrdquorsquo Asian Survey 36(5) 447ndash67

Cheng Joseph Y S (1999) lsquoChinarsquos ASEAN policy in the 1990s pushing forregional multipolarityrsquo Contemporary Southeast Asia 21(2) 176ndash204

China Daily (1998) lsquoIndonesian riots concern Chinarsquo 29 July p 1mdashmdash (1998) lsquoStudent protest against atrocitiesrsquo 13 August p 1Dittmer Lowell and Kim Samuel (1993) Chinarsquos Quest for National Identity Ithaca

and London Cornell University PressFoot Rosemary (1998) lsquoChina and the ASEAN Regional Forum organizational

processes and domestic models of thoughtrsquo Asian Survey 38(5) 425ndash40Gilley Bruce McBeth John and Dolven Ben (1998) lsquoReady set rsquo Far Eastern

Economic Review 19 February 46ndash52Godley Michael R (1989) lsquoThe sojourners returned overseas Chinese in the

Peoplersquos Republic of Chinarsquo Pacic Affairs 62(3) Fall 330ndash52Goodman David S G (199798) lsquoAre Asiarsquos ldquoethnic Chineserdquo a regional-security

threatrsquo Survival 39(4) Winter 140ndash55Grant Richard (1993) China and Southeast Asia into the Twenty-rst Century

Washington DC Center for Strategic and International StudiesHayter Roger and Shun Sheng Han (1998) lsquoReections on Chinarsquos open policy

towards foreign direct investmentrsquo Regional Studies 32(1) 1ndash16Hu Wei-jen (1995) lsquoIn search of national security strategic concepts of the

Republic of China at a crossroadsrsquo Comparative Strategy 14 195ndash203Jiang Zemin (1997) lsquoHold high the great banner of Deng Xiaoping Theory for

an all round advancement of the cause of building socialism with Chinesecharacteristics into the 21st centuryrsquo Beijing Review 6ndash12 October 10ndash33

Johnson Douglas (1997) lsquoDrawn into the fray Indonesiarsquos Natuna Islands meetChinarsquos long gaze southrsquo Asian Affairs An American Review 24(3) 153ndash61

Lander Mark (1998) lsquoUnrest in Indonesia the Chinese the target of violence ina time of wrathrsquo New York Times 16 May p A-1

Lianhe Zaobao (1998) lsquoWuyue paihua baodong hou Zhongguo qianglie yaoqiuYinni Quebao huaren chuanyirsquo [In the wake of the anti-Chinese riots inMay China strongly demands Indonesia to safeguard the rights and inter-ests of the ethnic Chinese] 9 October on-line

Lim Robyn (1998) lsquoThe ASEAN Regional Forum building on sandrsquoContemporary Southeast Asia 20(2) August 115ndash36

Liu Hong (1998) lsquoOld linkages new networks the globalization of overseasChinese voluntary associations and its implicationsrsquo The China Quarterly155 582ndash609

Mozingo David (1976) Chinese Policy toward Indonesia 1949ndash1967 Ithaca andLondon Cornell University Press

Nathan Andrew (1994) lsquoHuman rights in Chinese foreign policyrsquo The ChinaQuarterly 139 (September) 622ndash43

Passell Peter (1998) lsquoEconomic scene Chinarsquos stable currency is protecting it fornowrsquo New York Times 25 June p A-1

Ramanathan Indira (1994) China and the Ethnic Chinese in Malaysia andIndonesia 1949ndash1992 New Delhi Radiant Publishers

Renmin Ribao [Peoplersquos Daily] (1998) lsquoYinni caiqu zuoshi wending jushirsquo [Indonesiatakes measures to stabilize the situation] 18 May on-line

mdashmdash (1998) lsquoWaijiaobu fayanren da jizhe wenrsquo [Foreign Ministry spokesmananswers reportersrsquo questions] 22 May on-line

Daojiong Zha China and the May 1998 riots of Indonesia 573

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145

mdashmdash (1998) lsquoZhongguo zhenfu miqie guanju Yinni Zhongguo qiaomin jinyursquo [TheChinese government closely concerned about Chinese nationals inIndonesia] 22 May on-line

mdashmdash (1998) lsquoYini huaren de hefa quanyi ying dedao baohursquo [The rights and inter-ests of Indonesians of Chinese descent ought to be protected] 3 Auguston-line

mdashmdash (1998) lsquoQuanguo fulian fabiao shenming yaoqiu wei shouhai Yinni huarenfuniu shengzhang zhengyirsquo [The All-China Womenrsquos Association issuesappeal justice for Chinese women in Indonesia] 7 August on-line

mdashmdash (1998) lsquoJiang zhuxi huijian Yinni zongtong Habibirsquo [President Jiang meetsIndonesian President Habibie] 18 November on-line

Reuters (1998) lsquoBeijing raises concern about Chinese in Indonesiarsquo 29 Julymdashmdash (1998) lsquoTaiwan condemns anti-Chinese violence in Indonesiarsquo 29 Julymdashmdash (1998) lsquoTensions halt Taiwan rice aid to Indonesiarsquo 20 AugustROC Ministry of Foreign Affairs (1988) Ministry of Foreign Affairs News Release

No 071 on-line at httpwwwmofagovtwRoy Denny (1996) lsquoThe ldquoChina threatrdquo issue major argumentsrsquo Asian Survey

36(8) 758ndash71Sadli Mohammad (1998) lsquoThe Indonesian crisisrsquo ASEAN Economic Bulletin 15(3)

272ndash80Siew Vincent (1998) lsquoTaiwan and the Asian Crisisrsquo The Economist 24 January

p 66Smith Anthony (1999) lsquoIndonesiarsquos role in ASEAN the end of leadershiprsquo

Contemporary Southeast Asia 21(2) August 238ndash60Song Zhenzhao (1998) lsquoZhongong yu dongnanya zhi zhengjing guanxi yu fazhan

huigu yu qianzhanrsquo [Politicalndasheconomic relations between PRC andSoutheast Asia review and propects] Dongya Jikan [East Asia Quarterly](Taiwan) 29(1) 57ndash78

South China Morning Post (1998) lsquoPublic anger sees Beijing change tackrsquo 16August on-line

mdashmdash (1998) lsquoSpeech may signal better China tiesrsquo 17 August on-linemdashmdash (1998) lsquoQian steps up call for action by Indonesiarsquo 30 September on-lineStorey Ian James (1999) lsquoCreeping assertiveness China the Philippines and the

South China Sea disputersquo Contemporary Southeast Asia 21(1) 95ndash115Sukma Rizal (1994) lsquoRecent developments in Sino-Indonesian relations an

Indonesian viewrsquo Contemporary Southeast Asia 16(1) 35ndash45Sung Yun-Wing (1991) The ChinandashHong Kong Connection The Key to Chinarsquos

Open Door Policy New York Cambridge University PressSuryadinata Leo (1981) lsquoThe Chinese minority and Sino-Indonesian diplomatic

normalizationrsquo Journal of Southeast Asian Studies 7(1) 197ndash206mdashmdash (1985) China and the ASEAN States The Ethnic Chinese Dimension

Singapore Singapore University Pressmdashmdash (1987) lsquoEthnic Chinese in Southeast Asia problems and prospectsrsquo Journal

of International Affairs 41(1) 135ndash51mdashmdash (1990) lsquoIndonesiandashChina relations a recent breakthroughrsquo Asian Survey

30(7) 682ndash96mdashmdash (1992) Pribumi Indonesians the Chinese Minority and China 3rd edn

Singapore Heinemann Asiamdashmdash (ed) (1995) Southeast Asian Chinese and China The Politico-Economic

Dimension Singapore Times Academic PressThe Economist (1998) lsquoTaiwan launches a lifeboatrsquo 24 January pp 65ndash7The Jakarta Post (1998) lsquoPremier Siew ends his three-day Asian tourrsquo 22 January

on linemdashmdash (1998) lsquoChinese issue is RI ldquointernalrdquo affairrsquo 23 April on-line

574 The Pacic Review

123456789

101112131415161718192021222324252627282930313233343536373839404142434445

The Jakarta Post (1998) lsquoChina RI sign barter deal to boost two-way tradersquo 26November on-line

Tripathi Salil and Dolven Ben (1998) lsquoShattered condence ethnic-Chinese holdthe key to economic revivalrsquo Far Eastern Economic Review 161(22) 20ndash3

Valencia Mark J (1995) China and the South China Sea Disputes Adelphi Paper298 London Oxford University Press

Vatikiotis Michael (1998) Indonesian Politics under Suharto 3rd edn LondonRoutledge

mdashmdash Forney Matt and Dolven Ben (1998) lsquoCompatriot games China changestack on atrocities in Indonesiarsquo Far Eastern Economic Review 20 August20ndash3

Waldron Scott (1995) lsquoIndonesian Chinese investment in China magnitude moti-vations and meaningsrsquo AustraliandashAsia Paper No 73 Center for the Studyof AustraliandashAsia Relations Faculty of Asian and International StudiesGrifth University

Wang Gunwu (1991) China and the Chinese Overseas Singapore Times AcademicPress

Whiting Allen S (1997) lsquoASEAN eyes China the security dimensionrsquo AsianSurvey 37(4) 299ndash322

Xinhua English Newswire (1998) lsquoJiang China will never use overseas Chinese toseek gainrsquo 18 November on-line

Zhao Quansheng (1996) Interpreting Chinese Foreign Policy Hong Kong OxfordUniversity Press

Zhongguo Shibao [China Times] (1998) lsquoYinni huaren shou rou Beijing fanyingruanruo wulirsquo [Indonesian Chinese suffer from abuses Beijing responds withweakness] 29 July on-line

mdashmdash (1998) lsquoYini huanying wo zutuan diaocha zhenxiangrsquo [Indonesia welcomesROC to send delegates to joint fact-nding team] 1 August on-line

Daojiong Zha China and the May 1998 riots of Indonesia 575

123456789

10111213141516171819

1120212223242526272829

11303132333435363738394041424344

1145