Prime Minister John Key has arrived in Indonesia at a time of heightened tensions over the neighbouring South China Sea.

Key is there to meet Indonesian President Joko Widodo for the first time and to improve trade links with a country of 255 million people. He arrives in Jakarta tonight after a week in Europe.

The official visit comes on the heels of a ruling by an international court at The Hague, which said last week that China's claims to the disputed South China Sea had no merit. China rejected the ruling and there are fears confrontation and conflict could escalate in the region.

The New Zealand Government is not taking sides, instead calling on all parties to respect the ruling.


The issue is likely to come up in talks between Key and Widodo tomorrow. As the largest member of Asean - the group of Southeast Asian countries - Indonesia could have an important role to play in the dispute.

Like New Zealand, Indonesia gave a measured response to the tribunal's ruling.

Widodo, however, has also made some blunt gestures. Last month, he made a show of sailing a warship to Indonesian islands where China claims it has fishing rights.

His Government has also destroyed Vietnamese and Malaysian fishing boats with explosives after they were caught fishing illegally in Indonesian waters - raising concerns that relations between Southeast Asian nations were worsening.

The director of Victoria University's Centre for Strategic Studies, David Capie, said Indonesia was in a difficult position.

"It wants a positive relationship with China. It wants Chinese investment. But it also wants to push back against what it sees as Chinese coercion. It's trying to find a way to strike a balance."

International law expert Alexander Gillespie, from the University of Waikato, said the risk of conflict in the disputed waters was very high.

After the ruling, China warned that it could introduce an air defence zone. If foreign planes flew through such a zone, China could respond aggressively, Gillespie said.

He also said there would be pressure on New Zealand to follow the United States and Australia's position on the South China Sea, which was more critical of China.

But China was economically important so New Zealand was unlikely to be outspoken.

China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei all have competing claims in the South China Sea, a key shipping route potentially holding huge oil and gas reserves.


• 255m population (4th-biggest in the world)

• 17,000 islands

• 16th largest economy, set to be 7th-largest in 2025

• $1.7b annual two-way trade with NZ, goal of $4b