Pasar Baru is a shopping arcade that still retains some of its colonial legacy in a vastly changing city space of Jakarta. Originating from a Chinese settlement area, this shopping arcade has survived the worst anti-Chinese riots in Jakarta, in 1998. This paper examines the complex way space and identity has been constructed and negotiated in this site since the colonial period. This paper shows that the Dutch-made cosmopolitan hybrid modernity actually offers a (partial) solution to multi-ethnic urban society, while the spatial and social segregation based on race, class and religion, a postcolonial legacy, which is now the trend of the spatial development in Jakarta, actually aggravates the inter-group conflict in the metropolis. © 2011 Copyright Taylor and Francis Group, LLC.