Indonesia has the greatest number of overseas Chinese in the world; however, ethnic Chinese is the third largest ethnic group in Indonesia. Due to different history and culture, there is a gap between indigenous people and ethnic Chinese. Therefore, the Indonesian government regulated many policies which were against ethnic Chinese since 1949. The policies on ethnic Chinese during the periods of President Sukarno and President Suharto had been changed from loose to strict, and from strict to assimilation, and from assimilation to deregulation. After the era of Suharto, the policies on ethnic Chinese were changed again to pluralism. However, China is the specific factor in Indonesia¡¦s changing policy toward ethnic Chinese. Therefore, this research is trying to discuss Indonesia¡¦s changing policies on ethnic Chinese during the periods of President Sukarno and President Suharto and to the post Suharto era, which is also the democratization stage. After discussing the policy- changing on ethnic Chinese, the thesis will also analyze the role of China in the process of Indonesia¡¦s changing policies toward ethnic Chinese.