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JAKARTA: China and Indonesia opened a new round of high-level talks on Friday, with defence cooperation, regional security, political relations and trade expected to dominate discussions as Jakarta seeks to maintain strong ties with Beijing while preserving its relationship with Washington. Chinese Foreign Minister Wang Yi, visiting Jakarta for the first time in two years, met his Indonesian counterpart Sugiono before joining a “2+2” dialogue involving the two countries’ defence ministers. The talks come at a sensitive moment for Southeast Asia, where tensions in the South China Sea, competition between China and the United States and growing economic interdependence are putting pressure on regional governments to carefully balance their relationships with major powers. Wang said the new dialogue mechanism was timely as the world faced increasingly complex challenges. “Unilateralism and hegemonic acts bring serious impact on global cooperation and stability,” he said, adding that China aimed to build cooperation with Indonesia at a high level. Indonesian officials said economic issues and political relations would be among the foreign ministers’ priorities, while China said the discussions would also cover defence cooperation and international and regional affairs. Defence Cooperation Expands Chinese Defence Minister Dong Jun was welcomed with a military honour guard at Indonesia’s defence ministry, where he said the two armed forces had significant room to strengthen cooperation. “The prospects for cooperation between the two militaries are broad,” Dong said, describing the relationship as increasingly effective and higher in quality. Indonesia’s Defence Minister Sjafrie Sjamsoeddin said the countries planned to expand military activities, including joint exercises, officer exchanges and cooperation in the defence industry. He described the move as an important step in strengthening Indonesia’s defence capabilities. The discussions follow a joint naval exercise between China and Indonesia last week that drew attention because of its location east of Taiwan. Taiwan, which Beijing claims as part of China, expressed concern over the exercise. Indonesia’s navy said the activity was routine and noted that it conducts exercises not only with China but also with Japan and the United States. Defence analyst Curie Maharani said the episode highlighted how military diplomacy could serve broader strategic purposes. Indonesia, she said, had gained an important lesson about how major powers can use defence cooperation to project influence. Balancing China and Washington Jakarta’s approach reflects its long-standing “free and active” foreign policy. President Prabowo Subianto has repeatedly said Indonesia intends to remain non-aligned while maintaining friendly relations with all countries, including China and the United States. That balancing act is becoming more complicated as competition between Washington and Beijing intensifies. Indonesia also has differences with China over developments in the South China Sea. Beijing claims almost the entire disputed waterway, while Indonesia has sought to avoid becoming directly involved in broader territorial disputes between China and the Philippines, Malaysia and Vietnam. Jakarta has generally maintained a measured position, prioritising diplomacy and economic cooperation while protecting its own interests. Billions at Stake Economic ties provide another major reason for Indonesia to maintain close relations with Beijing. China contributed $3.9 billion in foreign direct investment to Indonesia during the first half of 2026, according to Indonesian figures. Chinese companies have invested heavily in industries ranging from nickel processing and steel to electric-vehicle batteries. Indonesia possesses the world’s largest nickel reserves, making it strategically important to China’s rapidly expanding electric-vehicle supply chain. Among major investors are Contemporary Amperex Technology, one of the world’s largest electric-vehicle battery makers, and Tsingshan Group, which operates nickel and steel facilities in Indonesia. However, the growing investment relationship has not been free of tension. In May, Chinese companies operating in Indonesia urged Jakarta to introduce more business-friendly policies, arguing that higher taxes and a new nickel pricing formula were increasing costs and threatening investment. The China Chamber of Commerce in Indonesia also complained of what it described as excessive regulation and enforcement, while raising allegations of corruption and extortion. The concerns underline the challenge facing both countries: expanding economic cooperation while managing disagreements over regulation, investment conditions and strategic interests. For Indonesia, Friday’s talks therefore carry significance beyond bilateral diplomacy. Jakarta is trying to strengthen its economy and defence capabilities without becoming overly dependent on either Beijing or Washington. In For China, deeper engagement with Indonesia offers an opportunity to strengthen its influence in one of Southeast Asia’s largest economies while expanding defence and economic partnerships in a strategically important region.