Anarchy and the geoeconomy: How China's adjustment impacts Indonesia
Great-power conflict won’t hit Southeast Asia with battleships first—it will arrive through hollowed-out commodity prices, flooded domestic markets and a battered rupiah.
Anarchy and the geoeconomy: How China's adjustment impacts Indonesia
Great-power conflict will not begin with battleships but through commodity price fluctuations, market flooding, and a weakened rupiah, warns scholar John Mearsheimer in his 50th-anniversary essay for International Security. After China and Russia became great powers around 2017, the United States and China entered an increasingly dangerous rivalry, he argues.
Southeast Asia faces the most significant risk, as China's rivalry with the US is far more plausible than a US-Soviet clash ever was. China has no major war experience and no powerful allies to restrain its actions, while its claims over Taiwan and the South China Sea stem from nationalism and cold strategy alike. East Asia lacks a rigid border, making naval skirmishes more plausible than land wars in Europe.
The immediate battleground for this rivalry is geoeconomic, not military. According to Michael Froman's article in Foreign Affairs, China's 2025 trade surplus was nearly $1.2 trillion, giving it 30% of global industrial production, and 45% by 2030. This overwhelming export surplus and command over global industrial output have created a situation where global GDP is projected to grow only 3.1% in 2026, while China's export surplus has surged over 20% year-on-year.
This imbalance resists easy negotiation because it has fiscal roots, not just industrial ones. Nearly 30% of Chinese industrial firms operate at a loss, and 34% in sectors targeted by Made in China 2025. These zombie enterprises continue to exist because local provincial revenues depend directly on their existence.
When China shifts to domestic household consumption, local tax bases will vanish overnight, ensuring that Beijing's reforms remain half-hearted. The consequences are immense: China maintains 55 million units of automotive capacity for a global market of 90 million, and solar manufacturing capacity is double the entire world's annual installations. A producer at this scale sets global prices rather than taking them.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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