Similarity and differences between China and Indonesia

Comments on Sherry Tao Kong “Economic and political transition in China and Indonesia”, 4/08/2010, http://www.eastasiaforum.org/2010/08/04/economic-and-political-transition-in-china-and-indonesia/
It is an interesting comparative study of China and Indonesia.

Although the two countries have shared certain similarities, the past decade or so following the Asian financial crisis has seen them parting considerably.

I would characterise the two as:

China - politics follows economics

Indonesia - economics follows politics

For the former, its strategy has been to develop its economy as rapidly as it could, taking advantages of its existing political system and at the same time it reforms its political system slowly and surely as the economy grows. It has used that strategy in the past decades and it is likely to continue that strategy in the foreseeable future. In one sense, it is a tried and successful formula.

For the latter, the Asian crisis has forced its political reforms and its economy has developed along the reformation and evolution of its political institutions. Given its democratic system, its strategy for the future may be to strengthen its political institutions to provide the best policy environment for the economy to grow. It will need to get the best combination of politics and economics under democracy.