Conflict of Interest (4)

The controversy surrounding the Morowali airport area, where state authorities such as the police and customs officers were reportedly absent, highlights a troubling historical trajectory in which industrial enclaves were allowed to operate with exceptional autonomy in the pursuit of foreign investment, particularly from China. 

In reality, there is only one political entity that officially calls itself “China”, but the conflict lies in who claims the right to represent it. After the Chinese Civil War ended in 1949, the Communist Party established the People’s Republic of China (PRC) in Beijing, while the defeated Nationalist government retreated to Taiwan and continued to call itself the Republic of China (ROC). Both governments initially claimed to be the legitimate ruler of all China, including the mainland and Taiwan, which created the impression that there were “two Chinas.” Over time, the international community overwhelmingly recognised the People’s Republic of China as the sole representative of China in the United Nations, especially after 1971 when the UN seat previously held by the Republic of China was transferred to the PRC. As a result, the PRC insists on the “One China” principle, asserting that Taiwan is part of China, while Taiwan maintains its own government, military, legal system, and democratic institutions, functioning effectively as a separate state in practice.

Ethnically, the majority of people both in mainland China and in Taiwan are Han Chinese, which means that, from a biological or ethnic perspective, they can be referred to as “Chinese.” In this sense, Taiwanese people are also included under the broader ethnic category of “Chinese.” However, in terms of citizenship, politics, and national identity, Taiwanese people usually identify themselves as Taiwanese. They hold Republic of China (ROC) passports, have their own government, and operate a democratic system that is distinct from that of the People’s Republic of China (PRC). Therefore, in contemporary international discourse, the term Chinese generally refers to citizens of the PRC or people originating from mainland China, whereas Taiwanese refers to the citizens of Taiwan (ROC), who are politically separate from the PRC. While ethnically they are Han Chinese, in terms of nationality and political identity, they are Taiwanese, not “Chinese” in the sense of being citizens of the PRC.

The People’s Republic of China (PRC) was established by the Chinese Communist Party on 1 October 1949 in Beijing, following the end of the Chinese Civil War. The PRC governs mainland China, including Hong Kong and Macau, although the latter two enjoy the status of Special Administrative Regions (SAR). Internationally, when people refer to “China,” they officially mean the PRC. The PRC asserts the “One China” principle, which states that Taiwan is part of its territory, even though in practice the PRC does not exercise governmental control over Taiwan.

The Republic of China (ROC / Taiwan) was the government that previously ruled all of China before losing the Civil War. After 1949, the ROC retreated to the island of Taiwan and continued to operate there. The ROC governs Taiwan, the Penghu Islands, Kinmen, Matsu, and several smaller surrounding islands. It has its own government system, including a president, legislature, judiciary, military, economy, and a modern political democracy.

In terms of terminology, when people generally say “China,” they usually refer to the PRC, as it has been the recognised representative of China at the United Nations and in international diplomacy since 1971. When people say “Taiwan,” they mean the territory governed by the ROC, which is sometimes informally called the “Republic of Taiwan” in popular discourse, although its official name remains the ROC.

In conclusion, China = PRC (People’s Republic of China), officially recognised internationally, while Taiwan = ROC (Republic of China), a de facto independent state with its own government.

Taiwan is not under the control of the People’s Republic of China (PRC). In practice, Taiwan has its own government, the Republic of China (ROC), as well as its own military, legal system, and economy, all of which are entirely separate from Beijing. The PRC claims Taiwan as part of its territory and emphasises the “One China” principle, but this claim is political and diplomatic in nature rather than reflective of the actual governance on the island. In other words, although the PRC officially declares Taiwan as its territory, Taiwan operates de facto as an independent state, and the PRC has no administrative, legislative, or military control over the island.

In contemporary international discourse, the term “China” is more precise and widely recognised than “Tiongkok.” While “Tiongkok” is a historical and traditional transliteration used primarily in older Indonesian texts and classical literature, “China” has become the standard term in diplomacy, international law, and global media. Official documents, treaties, and United Nations resolutions consistently use “China” to refer to the People’s Republic of China (PRC), reflecting the global consensus on its political legitimacy and international recognition.

Moreover, using “China” aligns with contemporary global usage, facilitating clear communication in academic, economic, and political contexts. For instance, in trade agreements, international reporting, or multinational corporate operations, the term “China” is universally understood, whereas “Tiongkok” may create ambiguity for non-Indonesian speakers and does not appear in formal international documents.

Therefore, while “Tiongkok” retains cultural and historical resonance within Indonesia, “China” is more accurate, practical, and internationally recognised in the modern era, ensuring consistency and clarity in global discourse.

Legally and diplomatically, most countries recognise only one China—the People’s Republic of China—while maintaining informal or unofficial relations with Taiwan. However, in practical terms, Taiwan operates independently and does not accept rule from Beijing, which creates a unique situation where one state functions as sovereign without widespread diplomatic recognition. The truth is not that there are two Chinas, but rather that there is one internationally recognised China and one self-governing entity that claims historical continuity, leading to an ongoing dispute over sovereignty and identity.

Now, back to Morowali's problem. The origins of this arrangement can be traced back to the late 2010s, when the Indonesian government formalised large-scale nickel and stainless steel industrial zones in Morowali through cooperation agreements with Chinese state-linked corporations such as Tsingshan Group. These agreements were legitimised through presidential regulations on national strategic projects and special economic zones, which effectively granted corporate actors operational privileges normally reserved for the state, including security management and logistical control.

This process was further reinforced by the state doctrine of accelerating downstream industrialisation, under which foreign investors were granted extensive concessions in exchange for capital inflows and technology transfer. As a result, private security forces and company-controlled access systems emerged as substitutes for formal state presence, creating a hybrid governance structure in which the Indonesian state ceded practical authority to foreign-backed corporate entities. The fact that immigration, customs, and policing functions could reportedly be managed internally by the company signals a profound institutional compromise, blurring the boundary between national sovereignty and commercial dependency.

The implications for Indonesia are far-reaching. In political terms, such arrangements undermine the state’s monopoly on legitimate authority, lending credibility to the characterisation of these zones as “states within a state.” Economically, they deepen structural dependence on foreign capital and supply chains controlled by China, particularly in the global battery and electric vehicle industries. Socially, they risk marginalising local communities and labour, who may find themselves subject not to the Indonesian legal system, but to corporate rules enforced without democratic accountability. In strategic terms, the situation raises concerns about national security, as foreign-linked industrial enclaves with restricted state access could potentially function as geopolitical footholds.

The Morowali Airport case can very plausibly be analysed through the lens of conflict of interest, both at an institutional and a personal level, and it deserves to be examined comprehensively. Historically, the airport is located within a nickel industrial zone largely controlled by foreign investors, particularly Chinese companies, which have been granted extensive concessions by the Indonesian government during the Joko Widodo regime. These concessions include the management of strategic facilities such as the airport, which functionally supports their industrial operations. In this context, a conflict of interest arises when state authorities responsible for security, immigration, and customs are either absent or deliberately weakened, despite the fact that the decision to grant such freedom was made or approved by government officials.

A significant institutional conflict emerges when state bodies such as the police and customs authorities, which are supposed to hold full supervisory power over all airports, see their authority effectively shifted to private entities due to industrial concessions. This situation represents a conflict between the duties of the state and the pressures or incentives offered by investors. On a personal or political level, the conflict of interest becomes more apparent if the officials who approved these concessions receive direct or indirect benefits—such as political support, business advantages, or favourable project arrangements—thereby prioritising personal gain over public interest.

There is also a strategic and geopolitical dimension, as many of the companies involved are linked to Chinese networks, raising the risk that foreign economic and political interests may collide with national sovereignty. In this sense, the conflict of interest operates at the level of national security and strategic policy, where internal government decisions or regulations may be influenced by external agendas.

Therefore, this case is not merely a matter of airport operations, but rather a symbol of the interaction of conflicting interests among the government, foreign investors, and state authorities. An analysis inspired by Dennis F. Thompson, for instance, would highlight the need for transparency, accountability, and effective checks and balances, as the weakening of state oversight creates opportunities for personal or corporate interests to undermine the public good.

It is well documented that the IMIP complex employs a significant number of foreign workers, many of whom are Chinese nationals. Reputable news agencies, company disclosures, and academic reports confirm that thousands of Chinese workers have been brought into the region over recent years to support the nickel-based industrial operations. This context makes it entirely plausible that substantial flows of foreign workers travelled through the airport or transport facilities connected to the industrial park.

From a geopolitical risk standpoint, the possibility that foreign personnel could enter Indonesia through Morowali without proper state oversight raises the alarming prospect of silent influence embedded within critical industrial infrastructure. If such a scenario were to be confirmed, the short-term risk would manifest in heightened public outrage and political instability, as citizens begin to question whether the government still retains full control over its borders and strategic assets. Over time, the risk would shift toward structural dependency, whereby Indonesia’s industrial operations, particularly in the nickel and electric battery sectors, become increasingly reliant on foreign expertise, logistics networks, and capital flows. This reliance could provide a foreign power with leverage capable of shaping Indonesia’s policy decisions, especially regarding maritime disputes, regional security cooperation, and trade alignments. In the most severe long-term scenario, Indonesia could find itself gradually repositioned within the geopolitical sphere of influence of another state, not through military conquest, but through economic entanglement and infrastructural penetration.

The mere fact that an airport—inside a major industrial zone—has operated for years without state monitoring represents a serious governance failure. The potential risks include illegal immigration, smuggling of goods or hazardous materials, labour exploitation, environmental damage, and erosion of state sovereignty. The ambiguity and lack of transparency create fertile ground for misuse or covert operations, which naturally spawns public anxiety.

The debate surrounding Morowali as a so‑called “state within a state” reflects a deeper anxiety about sovereignty rather than the spread of communist ideology. Communism as a global ideology has largely lost its appeal, and China no longer exports communism in the classical sense. Instead, the Chinese Communist Party uses its political framework to maintain state control and secure economic and geopolitical influence, rather than spreading Marxist doctrine.

The decline of communism as a viable global ideology is evident in the way China has transformed itself over the past four decades. Scholarly analyses show that the legitimacy crisis of the late 1970s and 1980s forced the Chinese Communist Party to abandon the idea of exporting revolutionary communism. Instead, the Party embraced market reforms under Deng Xiaoping, creating a hybrid system often described as state capitalism. This system retains the Leninist political monopoly but relies on economic pragmatism rather than ideological evangelism.

Surveys and studies indicate that official socialist ideology resonates mainly with Party officials and those close to power, while ordinary citizens, businesspeople, and students often see it as irrelevant. This demonstrates that communism as a belief system no longer functions as a mass mobilising force. Rather, ideology is instrumentalised as a tool of control, ensuring loyalty within the Party and suppressing dissent, but not as an export commodity.

Analysts such as Minxin Pei argue that China has reverted to a form of neo‑Stalinist rule, where ideology is less about conviction and more about legitimising authoritarian governance. In this sense, the Communist Party does not “sell communism” abroad; it sells economic partnerships, infrastructure projects, and strategic influence. The ideological label of communism is retained domestically to justify one‑party rule, but internationally China’s ambition is to secure control over resources, markets, and political leverage.

Thus, communism today is not a product that China markets to the world. It is a domestic instrument of control, while the real export is economic power and geopolitical influence.

The significant presence of Chinese companies in the nickel and steel industries has created an enclave that appears to operate with limited oversight from Indonesian authorities, particularly in customs and immigration matters. This situation has led to suspicions that China is not only exporting capital but also attempting to project influence in ways that undermine national control. However, it is important to distinguish between economic dominance and ideological penetration. Contemporary China does not export communism in the classical sense; instead, it practises a form of state capitalism that combines market mechanisms with strong government control. The real risk in Morowali lies in economic dependency, weakened state authority, and the emergence of industrial enclaves that function outside the reach of national institutions. 

An enclave is a territory or area that is geographically surrounded by another state or jurisdiction, yet remains under a different authority or administration. It can describe a sovereign territory fully enclosed by another country, or a smaller zone within a state that operates under separate legal, economic, or political control. In modern usage, the term is also applied metaphorically to describe spaces where a foreign group exercises exclusive influence or operates with rules distinct from the surrounding state.

For example, a foreign-controlled industrial zone that manages its own security, immigration, and access, without effective oversight from national authorities, may be described as an enclave because it functions as a semi-autonomous space within a country. The essence of an enclave is separation: legally, administratively, culturally, or operationally, it stands apart from its surrounding environment even though it is physically located within it.

The existence of an enclave within a country poses significant risks to the integrity of the state, especially when the enclave operates under rules, authority, or influence that differ from national governance. The most fundamental danger lies in the erosion of state sovereignty. When a territory inside a nation functions with its own security, immigration controls, or administrative arrangements that bypass national institutions, the state effectively loses authority over part of its own territory. This creates a precedent in which the monopoly of legitimate power—one of the core foundations of a modern state—becomes fragmented.

Another major danger arises from the weakening of territorial cohesion. An enclave can develop into a space where national laws are not applied evenly, leading to legal pluralism that undermines the rule of law. If people or entities inside the enclave enjoy privileges that citizens outside do not, resentment and social divisions may deepen. Over time, the enclave can become culturally or politically detached, fostering parallel identities that challenge national unity.

Enclaves controlled or heavily influenced by foreign actors introduce an additional layer of risk. Such spaces may serve as channels for economic domination, covert political influence, or even military and intelligence activities. When foreign interests establish de facto control over strategic infrastructure—such as ports, airports, or industrial zones—the state may become dependent on external powers for critical functions, thereby compromising its ability to make independent decisions. In extreme cases, an enclave may evolve into a “state within a state,” where national authorities cannot enforce laws, regulate movement, or guarantee security.

Finally, the symbolic danger should not be underestimated. The public perception that parts of a country are no longer governed by national institutions can fuel distrust, nationalism, and political instability. Foreign powers may leverage it to exert pressure or extract concessions. Thus, the presence of an enclave threatens not only the physical and administrative integrity of a state, but also its psychological and political cohesion.

[Part 5]
[Part 3]

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