This chapter details how, with the People's Republic of China winning Mainland China and the diplomatic recognition of Indonesia, the positions of the Nationalists and Communists reversed. Having switched diplomatic recognition from Taipei to Beijing, Jakarta nevertheless allowed the Chinese Nationalist Party apparatus to continue its activities until 1958. Jakarta's ambiguous attitude induced a battle for influence between the two rival Chinese governments. As a regime in exile, the Chinese Nationalist government adjusted its past policies to fit the new circumstances resulting from its retreat to Taiwan. Having lost formal diplomatic representation, the Nationalists forged clandestine alliances with the Indonesian right-wing forces through the personal networks of the remaining Chinese Nationalist loyalists. In contrast with Taipei, Beijing prioritized state-to-state diplomacy over its connections to the overseas Chinese. By suspending the activities of the Chinese Communist Party (CCP) among the overseas Chinese and signing the Sino-Indonesian Dual Nationality Treaty, Beijing attempted to ease Jakarta's concern that the ethnic Chinese could be used as a Communist fifth column.