China’s maritime disputes with its Asian neighbors over the Senkaku Islands, the Spratly Islands, and the Paracel Islands have made these collections of islets well known. (In China, they are known as the Diaoyu, Nansha, and Xisha Islands, respectively.) So far, Indonesia has largely stayed out of the fray—so much so that it is rarely listed among the disputants. But it has long been one of them. As an archipelagic state, Indonesia is entitled to an exclusive economic zone (EEZ) around its Natuna Islands (or Riau Islands in Indonesia), which are located in the South China Sea. In that zone are some of Indonesia’s largest offshore natural gas fields. Unfortunately, a portion of that zone (see hatched area on map) also falls within China’s “nine-dash line” claim that encloses most of the South China Sea.
China has long asserted its sovereignty over everything inside its claim line, including the part that overlaps with Indonesia’s EEZ. But, until recently, it had no way to enforce its claims. Chinese naval and air forces were unable to project and sustain power into the southern South China Sea. So, Indonesia was free to downplay its dispute with China. Its foreign ministry has been reluctant to even acknowledge that any dispute exists between China and Indonesia, for fear that such an admission would lend some credence to China’s claims.
But all that has begun to change as China’s naval and air power in the South China Sea has grown. Over the last decade, China has built a new major naval base at Yalong Bay on Hainan Island. The base is now home to many of the Chinese navy’s newest nuclear-powered submarines, destroyers, and frigates. China’s new aircraft carrier, the Liaoning, even docked there in late 2013 during its first training exercise in the South China Sea. Even more worrying to Indonesian officials was probably a series of increasingly provocative Chinese actions. In March 2013 and again in February 2014, the Chinese navy conducted amphibious drills off Malaysia-claimed James Shoal, only 150 km from Indonesian waters. Three months later, China tussled with Vietnam over a Chinese offshore oil drilling rig, the Hai Yang Shi You 981 (or HYSY 981), operating in disputed waters. Finally, there were revelations over the summer that China had accelerated its efforts to expand the islands that it occupies within the Spratly group, like Johnson South Reef.
Read more: http://www.fpri.org/articles/2014/10/even-indonesia-concerns-over-chinas-reach-south-china-sea