Indonesia-China Economy: Boosting Electric Vehicle and Semiconductor Industries through the Two Countries Twin Parks Cooperation

Jakarta, INTI - In an effort to strengthen economic ties with the People's Republic of China (PRC), Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartarto, held an important meeting with H.E. Wang Lutong, the newly appointed Chinese Ambassador to Indonesia. The meeting, which took place on Tuesday (Nov 5) at the Coordinating Ministry for Economic Affairs office in Jakarta, focused on industrial collaboration through the Two Countries Twin Parks program, which links industrial zones in both Indonesia and China.

The Two Countries Twin Parks initiative represents a long-term strategy, where both nations aim to develop industrial zones with a focus on high-tech industries such as electric vehicles (EV) and semiconductors. These sectors are considered key drivers of future economic growth, aligning with Indonesia's vision of becoming a technological hub in Southeast Asia.

Focus on Electric Vehicle (EV) and Semiconductor Industries

During the discussion, Minister Airlangga revealed that several industrial zones in Indonesia, including Patimban Special Economic Zone (SEZ) and Subang SEZ, are ready to accommodate investments from Chinese companies. One notable Chinese company, BYD, has already expressed interest in investing in Indonesia. This move highlights the enormous potential of the twin parks program, designed to create integrated supply chains between the two countries.

According to data from Indonesia's Investment Coordinating Board (BKPM), China has become the third-largest investor in Indonesia for the period from January to September 2024. Investments are mainly focused on strategic sectors, including the electric vehicle industry. The influx of investment is expected to create new job opportunities and facilitate technology transfer that will benefit Indonesia's workforce.

Indonesia-China: Strategic Trade Partners for a Decade

For the past decade, China has been Indonesia's top trading partner. In 2023 alone, China accounted for about 24% of Indonesia's total trade value, making it the largest trading partner. Exports from Indonesia to China primarily consist of commodities such as minerals, palm oil, and marine products, while imports from China include machinery, technology products, and industrial raw materials.

The collaboration within the twin parks program is expected to further enhance trade volumes and solidify Indonesia's position as a global supplier of electric vehicle components and semiconductors. The products produced in these industrial zones will eventually be exported globally, positively impacting Indonesia's economic growth.

Looking Ahead: Technology and Innovation Collaboration

Minister Airlangga emphasized that the twin parks collaboration will be directed towards high-tech industrial development that not only supports economic growth but also creates a sustainable industrial ecosystem. The technology transfer process that will occur through these investments is expected to enhance Indonesia's capabilities in high-tech sectors.