New Report Reveals How U.S. Can Counter the Digital Silk Road in Indonesia

Washington, March 20, 2025 – Today, the Center for a New American Security (CNAS) released a new report, Countering the Digital Silk Road: Indonesia, by Vivek Chilukuri and Ruby Scanlon. The Digital Silk Road (DSR) is China’s initiative to shape critical digital infrastructure around the world to advance its geopolitical interests and technology leadership. As the DSR marks its 10th anniversary, CNAS has undertaken a major research project to assess its impact and explore how the United States and its allies can offer a more compelling and coherent alternative. The project will produce four in-depth case studies of strategically critical nations—Indonesia, Brazil, Kenya, and Saudi Arabia—and culminate in a full-length report.

The first case study focuses on Indonesia. With Southeast Asia’s largest digital economy, Indonesia has traditionally balanced economic engagement with China and security ties with the United States. However, this approach faces new pressures as the lines between commercial digital infrastructure and national security blur. Chinese firms have established a significant presence in Indonesia’s digital ecosystem, and Washington now has an opportunity to reassert itself as Jakarta seeks to accelerate digital connectivity, expand cloud adoption, and adopt artificial intelligence (AI). The report argues that U.S. success will depend on whether Washington can adopt a more strategic and ambitious approach to technological and economic statecraft.

The report outlines several recommendations for U.S. policymakers and industry leaders to provide a more competitive alternative to China’s DSR in Indonesia, including:

• Seize the generational opportunity to secure key public and private contracts as Indonesia accelerates its cloud migration;
• Proactively engage Jakarta about the Department of Commerce’s January 2025 AI diffusion rule and clarify pathways to achieve Tier 1 status;
• Combine the power of U.S. sanctions and incentives to mitigate Chinese advantages in strategic technology projects for digital infrastructure like subsea cables;
• Empower the International Development Finance Corporation to better support digital infrastructure projects;
• Mitigate China’s structural advantage in relationships and regulations;
• Support the Indonesian government’s AI and data protection policy development to reflect shared democratic values; and
• Expand U.S. support for Indonesia’s smart city ambitions.

The full report can be read here.

For more information or to arrange an interview with the report’s authors, please contact Alexa Whaley at [email protected].