Indonesia's diplomatic relations with China were suspended in 1967 in the aftermath of the 1965 attempted coup d'état. Beijing was suspected of complicity with the PKI in planning the coup and was viewed by the new ABRI-dominated government as a threat through its possible support of a resurgent underground PKI, both directly and through a "fifth column" of Chinese Indonesians. Jakarta repeatedly demanded an explicit disavowal by Beijing of support for communist insurgents in Southeast Asia as its sine qua non for a normalization process. Underlying the Indonesian policy was unease about China's long-range goals in Southeast Asia. The break in relations persisted until 1990, when, in the face of renewed mutual confidence, the two countries resumed their formal ties. The normalized relation boded well for resolving the status of some 300,000 stateless Chinese-descent residents of Indonesia and improving political and economic relations between the two nations. An exchange of visits by Chinese premier Li Peng to Jakarta in August 1990 and by Suharto to Beijing in November 1990 symbolized the dramatic alteration that had taken place.
On the Indonesian domestic scene, there was growing pressure for normalization in order to fully exploit the developing economic relationship with China. Even when relations were totally frozen, two-way trade had taken place through third parties, especially Singapore and Hong Kong. Indonesian businesses operating through the Chamber of Commerce and Industry in Indonesia (Kadin) were anxious to maximize the value of the trade by cutting out third parties.
At the international level, at least three factors had intervened to change Indonesia's posture. First, Indonesia, as a vigorous diplomatic player in the Cambodian peace process, had a strong interest in a successful outcome. To achieve that goal, China, the Khmer Rouge's sponsor, had to be brought along, and Indonesia's mediating role was greatly enhanced by normalization of relations with China. Second, Indonesia's long-held ambition to become titular leader of the Nonaligned Movement was furthered by normalization of relations with China, the movement's largest member. Finally, Jakarta's claim to regional leadership could not be asserted confidently without normalized relations with Beijing. For example, it would have been impossible for Indonesia in 1991 to have interjected itself into the South China Sea territorial disputes as an "honest broker" in the absence of relations with China, the most powerful nation involved in the South China Sea . All of these motives were at work at a time when the overarching structure of great power relations in the region was undergoing significant change. As the Soviet Union disintegrated and the United States presence diminished, China's relative power was increased, and Jakarta's need to deal officially with Beijing overcame the worries of the last die-hard anticommunist and anti-China elements in ABRI.
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