Well, they could take over Australia. That might provide them with significantly more resources and manpower to better be able to fight China if it comes down to it. And it's not like dealing with rowdy foreigners they have conquered is new to them.

And also keep in mind Indonesia's population alone in 1980 is 150 million. Throw in Japan and South Korea, you've doubled that and you still haven't gotten to Papua New Guinea and whatever else they might own in the Pacific. Japan's military power would be nothing to sneeze at, considering they both industrialized before China and they have the numbers to at least compete, being around a 2:1 ratio without the massive population boom associated with Maoism. So no, they probably couldn't defeat China but it would hardly be a smashing defeat.