Indonesia's Economic Advancement through Leveraging the Geopolitical Rivalry and Geostrategic between the USA and China in the Indo-Pacific Region

Muhamad Rizal Ibrahim(1), Rudi Sukandar(2*), Lusita Astuti Nusantari(3),

(2) London School of Public Relation (LSPR) Communication and Business Institute
(3) London School of Public Relation (LSPR) Communication and Business Institute and Abimantrana Nusantara Energi, PT
(*) Corresponding Author


Indonesia's challenge in leveraging the USA-China rivalry for economic advancement requires a nuanced approach, considering its passive foreign policy, strategic dependence, and domestic development challenges. The country aims to enhance recovery prospects by strengthening food and financial security, rebuilding regional growth, and connectivity, while also accelerating the transformation towards an inclusive and participatory digital economy. The study aims to explore how Indonesia can strategically leverage the USA-China rivalry in the Indo-Pacific to enhance its economic opportunities and examine the implications of the rivalry on its economic growth and development. This study employs a qualitative research design, analyzing, and interpreting data from literature reviews. The results show Indonesia's economic growth and development are intricately linked to its approach to leveraging the USA-China rivalry, managing infrastructure dependencies, and promoting the digital economy. To ensure sustainable progress and poverty reduction, well-designed policies and a multi-pronged approach are essential. Balancing relations with both the USA and China will be pivotal in attracting investment and expanding trade while avoiding undue external influence. Emphasizing digital infrastructure, talent, economy, and government sectors can also enhance the digital economy and contribute to Indonesia's long-term success on the global stage. Finally, Indonesia must navigate geopolitical complexities, its passive foreign policy, and domestic challenges to fully capitalize on the benefits of the USA-China rivalry while safeguarding its interests and promoting regional stability.

Full Text:



Abbondanza, G. (2022). Whither the Indo-Pacific? Middle Power Strategies from Australia, South Korea and Indonesia. International Affairs, 98(2), 403–421.

Bank Indonesia. (2018). Perkembangan Ekonomi Keuangan dan Kerja Sama Internasional: Divergensi Arah Pertumbuhan Ekonomi Global di Tengah Eskalasi Konflik Perdagangan dan Rebalancing Pasar Keuangan Global (III). Jakarta: Divisi Penelitian dan Asesmen Internasional Departemen Internasional Bank Indonesia.

Campbell, A. M. (2023). Contending with a Rising China: A Comparative Study of Middle-Power Strategies in the Indo-Pacific. Journal of Indo-Pacfic Affairs, 49–74.

De Lecea, A., & Zozaya, I. (2022, May 23). ‘In the Sea, We Triumph’. Indonesia’s Strategy to Counterbalance the US and China in the Southeast Asia. Retrieved July 2, 2023, from

Denisov, I., Paramonov, O., Arapova, E., & Safranchuk, I. (2021). Russia, China, and the Concept of Indo-Pacific. Journal of Eurasian Studies, 12(1), 72–85.

Dollar, D., Hass, R., Jones, B., Kim, P. M., Madan, T., Meltzer, J. P., … Yeo, A. (n.d.). Updating America’s Asia Strategy. Retrieved July 2, 2023, from

Erskine, A. (2022). The Middle Power Dynamic in the Indo-Pacific: Unpacking How Vietnam and Indonesia Can Shape Regional Security and Economic Issues. Journal of Indo-Pacific Affairs.

Grossman, D. (2021, June 7). Indonesia Is Quietly Warming Up to China. Retrieved August 1, 2023, from

Hamada, M. (2019). International Capital Flows and Vulnerabilities of the Indonesian Economy. Public Policy Review, 15(1), 99–120.

Hamilton-Hart, N., & McRae, D. (2015). Indonesia: Balancing the United States and China, Aiming for Independence. Sydney.

Hu, W. (2020). The United States, China, and the Indo-Pacific Strategy: the Rise and Return of Strategic Competition. The China Review, 20(3), 127–142.

Ing, L. Y., & Vadila, Y. (2019). U.S.–China Trade Tensions on Indonesia’s Trade and Investment. Asian Economic Papers, 18(3), 95–112.

International Trade Administration. (2021, September 12). Indonesia: Digital Economy Opportunities. Retrieved July 2, 2023, from

Iqbal, M., Elianda, Y., Akbar, A., & Nurhadiyanti. (2022). USA–China Trade War: Economic Impact on Indonesia. Journal of Public Affairs, 22(1).

Jung, S. C., Lee, J., & Lee, J. Y. (2021). The Indo-Pacific Strategy and US Alliance Network Expandability: Asian Middle Powers’ Positions on Sino-US Geostrategic Competition in Indo-Pacific Region. Journal of Contemporary China, 30(127), 53–68.

Kahkonen, S., Pape, U., & Ali, R. (2023, May 9). Pathways Towards Economic Security in Indonesia. Retrieved July 2, 2023, from

Kim, K. (2023). Analysing Indonesia’s Infrastructure Deficits from a Developmentalist Perspective. Competition & Change, 27(1), 115–142.

Laksmana, E. A. (2021, August 26). Indonesia Unprepared as United States, China Clash in Indo-Pacific. Retrieved July 2, 2023, from

Lefevre, A. (2022). The Geopolitics of US Maritime Priorities in the Indo-Pacific. Journal of Indo-Pasific Affairs, 1–17.

Myers, L. (2023). Indonesia Should Be at the Heart of US Indo-Pacific Policy. Retrieved July 2, 2023, from

Oh, M. (2021). US-China Rivalry and Digital Connectivity in the Indo-Pacific. Global Asia, 16(4), 54–59.

Perry World House. (n.d.). Economic Security and the Future of the Global Order in the Indo-Pacific. Philadelphia.

Randev, R. (2022, January 20). Reshaping the Indo-Pacific Construct through Strategic Geopolitical Convergences: AUKUS as a Harbinger of a Multipolar Hegemony in the Region. Retrieved July 2, 2023, from

Rayhana, R. (2023, April 22). Indonesia’s Neutral Approach Amid US-China Conflict. Retrieved July 2, 2023, from

Stromseth, J. (2019). Don’t Make Us Choose: Southeast Asia in the Throes of US-China Rivalry. Washington, D. C.: The Brookings Institution.

The World Bank. Helping an Indonesian Non-Bank Financial Institution Mobilize Private Capital for Sustainable Infrastructure.

United States Department of State. (2022, April 19). U.S. Relations With Indonesia. Retrieved July 2, 2023, from

Washington Business Dynamics. (2021, May 25). Closing the Infrastructure Investment Gap in Indonesia. Retrieved July 2, 2023, from

Zafar, A. (2022, February 15). US–China Tit-for-Tat Politics in the Asia-Pacific: Beyond Thucydides Trap to Multipolarity and Complex Interdependence. Retrieved July 2, 2023, from

Zhen, L. (2022, March 28). US Rivalry with China in Indo-Pacific ‘Needs Greater Economic Focus.’ Retrieved July 2, 2023, from


Journal Terindex di Garuda

Office Address:
Lembaga Penelitian dan Pengabdian Kepada Masyarakat
Republic of Indonesia Defense University
Jl. Salemba Raya No.14, Paseban,Jakarta Pusat, Daerah Khusus Ibukota Jakarta 10440, Indonesia

Lisensi Creative Commons
Jurnal Pertahanan: Media Informasi tentang Kajian dan Strategi Pertahanan yang Mengedepankan Identity, Nasionalism dan Integrity is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.