President Prabowo Subianto’s recent visit to China has led to US$10.7 billion investment commitment of joint Indonesian-Chinese companies cooperation in the fields of health, biotechnology, manufacturing, renewable energy, food security, and finance.
Minister of Investment and Downstream/Head of the Investment Coordinating Board (BKPM) Rosan Perkasa Roeslani, who accompanied President Prabowo Subianto on a state visit to Beijing, China on November 8-10, 2024, said the agreement was sealed during the Indonesia-China Business Forum (ICBF) event organized by Indonesian Chamber of Commerce and Industry’s ( KADIN ) China Committee and the Indonesian Embassy in Beijing. The event was attended by over 200 entrepreneurs and company leaders from China and Indonesia.
Rosan revealed that this business forum is a good opportunity for Indonesia and China to further strengthen cooperative relations, especially in the investment sector. The entrepreneurs present were able to dig deeper into investment opportunities between the two countries.
“China is one of the investors that consistently occupies the top position in Indonesia. And as President Prabowo said, the Indonesian government will continue to encourage the creation of a conducive investment climate and adequate facilities for investors,” Rosan said in a statement as quoted on Tuesday, November 12, 2024.
Chinese investment
Indonesia has established diplomatic relations with China since 1950. Economic relations between Indonesia and China continue to improve, especially after the entry into the ASEAN-China Free Trade Area in early 2010 and since the establishment of Indonesia-China Comprehensive Strategic Partnership in 2013.
China’s investment in Indonesia has continued to increase over the past few years, reflected by China’s rise from the 9th largest Foreign Direct Investment (FDI) in Indonesia in 2015, to the 2nd largest in 2019. From 2019 to September 2024, China’s investment in Indonesia reached US$34.19 billion or 18 percent of foreign investment in Indonesia.
During this period, China’s investment in Indonesia was dominated by the basic metal industry sector worth US$14.39 billion (42 percent); transportation, warehousing and telecommunications at US$7.98 billion (23 percent); chemical and pharmaceutical industries at US$3.18 billion (9 percent); electricity, gas and water at US$2.70 billion (8 percent); and industrial estates, housing and offices at US$2.21 billion (6 percent).
Based on location, China’s investment was greater outside Java (67 percent) than Java (33 percent). The locations with the highest investment were Central Sulawesi at US$12.54 billion (37 percent), West Java at US$7.19 billion (21 percent), North Maluku at US$5.18 billion (15 percent), Jakarta at US$ 1.66 billion (5 percent), and Banten at US$1.34 billion (4 percent).
