A confrontation between Indonesian and Chinese law enforcement vessels in the South China Sea over the weekend could mark a turning point in Indonesian foreign policy under President Joko “Jokowi” Widodo, forcing him to choose between two of his top priorities: attracting foreign investment – particularly Chinese investment – to fund his ambitious infrastructure agenda; and a more assertive defense of Indonesian territorial integrity and sovereignty over its natural resources. That, in turn, could herald a significant shift in diplomacy over the South China Sea.

Indonesia has long sought to avoid the appearance of alignment in contests between great powers – a delicate act that Indonesia’s first vice president described as “rowing between two reefs.” In the case of China’s extensive and ambiguous maritime claims in the South China Sea, which the United States has protested lack a basis in international law, Indonesia has historically sought to remain above the fray and serve as an “honest broker” between claimants.

But the Chinese Coast Guard’s recent actions may have just rendered that approach untenable, by demonstrating in particularly dramatic fashion what Indonesian officials have always feared: that China’s claims also directly infringe on Indonesia’s own interests.

On March 20, an Indonesian fisheries law enforcement vessel attempted to seize a Chinese trawler that it had found fishing in Indonesia’s exclusive economic zone (EEZ) near the Natuna Islands, at the southern tip of the South China Sea. Chinese officials did not deny the report, but described the area as “traditional Chinese fishing grounds.”

As the Indonesian authorities towed the boat back to port, a Chinese Coast Guard ship appeared. According to Indonesian fisheries minister Susi Pudjiastuti, the coast guard ship rammed the fishing boat under tow, forcing Indonesian officers to release it. The boat’s eight crew remain under arrest in Indonesia.

China does not claim the Natuna Islands, but there is an overlap between China’s nine-dash line – which outlines an ambiguous claim to much of the South China Sea – and Indonesia’s internationally recognized exclusive economic zone, which extends outward from the islands. As China has become more active in asserting rights within the nine-dash line, Chinese law enforcements vessels have occasionally harassed their Indonesian counterparts as they have sought to protect Indonesian fisheries from unlicensed Chinese trawlers.

In 2010, noting the overlap, Indonesia sought a diplomatic remedy by requesting that China clarify the nature of its claims inside the nine-dash line. The question, of course, concerns not just the rights to obscure fisheries, but the character of Chinese power in Southeast Asia. Will Beijing abide by international law, or will it seek to impose its will on its neighbors through displays of force? An answer from Beijing has not been forthcoming.

While the foreign ministry has been content to wait for a response from Beijing, others in the Indonesian government have not been so patient. Under Jokowi, they have been led by the maverick fisheries minister, Susi Pudjiastuti. The most popular minister in the Indonesian cabinet, Susi rose to prominence last year by blowing up impounded foreign boats that her ministry’s patrols had caught fishing without a license in Indonesian waters. Many Indonesians, outraged by reports of foreign theft of a critical natural resource, hailed Susi’s hardline approach as an appropriate deterrent. Meanwhile, the Indonesian military modernized and reinforced its facilities in the Natunas.

But Susi was restrained by her cabinet colleagues in what she could do to Chinese fishing boats that Indonesia had captured and impounded. One was quietly scuttled, but her colleagues prevented her from blowing it up for the cameras, fearing a backlash from Beijing.

Sensing her opportunity following the confrontation on March 20, she quickly called a press conference and denounced China’s “arrogant” behavior, promising to summon the Chinese ambassador – a privilege normally reserved for the foreign ministry – and later saying that Indonesia would consider taking China to court over the issue. Not to be outdone, Foreign Minister Retno Marsudi summoned China’s chargé d’affaires in Jakarta the next day, telling him that she felt the ministry’s efforts at diplomacy had been “sabotaged” by the incident.

The confrontation comes at a pivotal time, as the Coordinating Ministry for Politics, Law, and Security conducts an inter-agency review of Indonesia’s South China Sea policy, the first since China’s new assertiveness in the sea became apparent, which is designed to settle differences on the subject within the Jokowi administration. Unless a face-saving arrangement between Beijing and Jakarta is reached soon, the March 20 incident will push the review to take a harder line, despite the risk that would present to Jokowi’s ambitions for Chinese investment in Indonesia, and the appearance it would leave that Indonesia was aligning more closely with the United States.

Indonesia’s size — it is the fourth most populous country in the world — has historically offered it a leadership role in Southeast Asian diplomacy, though one which Jokowi has often appeared reluctant to take up. Nevertheless, Indonesia’s smaller neighbors still look to it for support and guidance. If this week’s events lead to a shift in the Indonesian position on the South China Sea, they will take note.

But if Indonesia does adopt a hard line toward China, of equal importance will be whether it does so only in the service of protecting its own narrow interests – for example by seeking assurances from China regarding only its own economic prerogatives – or if it does so in defense of the international norms and principles that protect the maritime interests of all countries, including Indonesia’s smaller neighbors.

A careful examination of Jokowi’s foreign policy instincts suggests that the former course of action may prove attractive to him, as it would allow Indonesia to maintain its distance between the two great powers and continue to attract Chinese investment unimpeded. But what guarantee would Jokowi have that Beijing would continue to honor its assurances? Greater Indonesian leadership in the region, though it may initially seem more difficult, would look forward to a future in which Chinese power was constrained by Beijing’s support for international norms and institutions, and would therefore better protect Indonesian interests in the long-term.

About Aaron L. Connelly

Aaron L. Connelly is a research fellow in the East Asia Program at the Lowy Institute for International Policy, where he focuses on Southeast Asia, particularly Indonesia and Myanmar, and the US role in the region. Previously, Aaron worked at Albright Stonebridge Group and CSIS in Washington, and as a Fulbright scholar and visiting fellow at the Centre for Strategic and International Studies in Jakarta.