Last week saw yet another incident between Jakarta and Beijing over Chinese fishermen in the waters around Indonesia's Natuna Islands. It was the third such incident in three months, with the first on March 19 and the second on May 27.

The latest incident on June 18 saw a Chinese fishing boat being intercepted by an Indonesian patrol boat. According to one Chinese report, one fisherman was injured and rescued by a Chinese patrol boat, while the fishing vessel and seven other fishermen were detained by the Indonesian authorities. The Chinese patrol boat failed to rescue the Chinese fishing vessel as three Indonesian warships reportedly arrived in the vicinity.

The Chinese Foreign Ministry has protested and argued that the ship was fishing in "Chinese traditional fishing grounds", while the Indonesian authorities insisted that the ship was, in fact, fishing in Indonesia's exclusive economic zone (EEZ) around the Natunas.

The incidents take place against a backdrop of declarations by both Jakarta and Beijing that they have no territorial dispute in the South China Sea. China has repeatedly acknowledged that the Natuna Islands belong to Indonesia, while Indonesia has made no territorial demand in the South China Sea.

What China has never mentioned is that part of the waters around the Natuna Islands fall within China's "nine-dash line" - a reference to dotted lines in maps that appear to be used by China to make implicit claims over 90 per cent of the South China Sea. Yet, under the United Nations Convention on the Law of the Sea (Unclos), to which both China and Indonesia are signatories, these waters fall within Indonesia's EEZ. Jakarta does not recognise the nine-dash line.

The Indonesian government regards the Natunas issue not as one of sovereignty but of illegal fishing in its EEZ. But within the Indonesian military establishment and the Indonesian elite, there is a differing view of the Natunas issue - as a sovereignty dispute with China illegally claiming part of Indonesia's EEZ. Those who hold this view want the issue resolved through international courts.

It seemed then that both Beijing and Jakarta did not want the issue to get out of hand... Indonesia needs both foreign investment and economic aid to spur its sluggish economy, and Beijing's investment in basic infrastructure projects would certainly help.

During the Yudhoyono presidency, there were similar incidents in the waters around the Natuna Islands, but both Jakarta and Beijing settled them quietly, hoping that the issue would go away.

However, when Mr Joko Widodo became President and Ms Susi Pudjiastuti was appointed Maritime Affairs and Fisheries Minister, she sought to protect domestic fishermen, and Jakarta became less tolerant and made the dispute public.

In the first of the three incidents cited earlier, a Chinese fishing boat entered the Natunas waters and was detained by the Indonesian navy for illegal trawling. But when the boat was being pulled in towards the Natuna Islands, a Chinese coast guard vessel, which is two or three times larger and more advanced than the Indonesian vessel, intervened and eventually succeeded in freeing the fishing boat. Eight crew members of the boat, however, remained detained by the Indonesian authorities.

Jakarta protested that the Chinese coast guard vessel had entered Indonesian waters and intervened in the arrest of the Chinese fishing boat. Beijing also protested and claimed that the Chinese fishermen were doing their usual work in Chinese traditional fishing grounds, and demanded Jakarta release the crew.

Yet, Jakarta has stated that under Unclos, there is no concept of "traditional fishing grounds" but only "traditional fishing rights". The latter are to be based on bilateral agreements but no such agreement exists between Jakarta and Beijing.

The Natunas incident gave rise to anti-China sentiment, especially among those in the anti-Joko group. It seemed that Beijing realised the danger of relations deteriorating and, on April 13, Chinese President Xi Jinping dispatched Mr Song Tao, the head of the Chinese Communist Party's international relations committee, to Jakarta for a meeting with President Joko. Soon after that meeting, Indonesia Cabinet Secretary Pramono Anung said in a statement to the press that the Natunas incident was "considered to have been settled" and had been due to a "misunderstanding". Mr Pramono also said that China respects Indonesian sovereignty and Indonesia agreed that the issue in the South China Sea would be peacefully resolved without lain pihak (external) intervention.

It seemed then that both Beijing and Jakarta did not want the issue to get out of hand, and for good reason. Indonesia needs both foreign investment and economic aid to spur its sluggish economy, and Beijing's investment in basic infrastructure projects would certainly help.

Beijing on its part needs Jakarta as a partner to help it realise the One Belt, One Road initiative.

On the South China Sea issue, the last thing Beijing would want is for Indonesia to enter the fray as a claimant state as that would push Jakarta towards the American camp.

Yet on May 27, a Chinese fishing ship reportedly entered the Natunas EEZ again. This time, the Indonesian navy was well-prepared and arrested the fishing vessel, and a Chinese patrol boat was said to not have dared to intervene. The Chinese Foreign Ministry has demanded the release of the fishermen, and its spokesman has also said that Beijing and Jakarta "have different views" on the waters where the Chinese ship was arrested.

It seems the Natunas EEZ issue has not been resolved after all and there is a risk the matter could develop into a larger conflict.

•The writer is visiting senior fellow at Iseas-Yusof Ishak Institute.

•S.E.A. View is a weekly column on South-east Asian affairs.