Strengthening Bilateral Ties – Indonesian President Prabowo Subianto’s Historic State Visit to China

Jakarta, INTI - In a landmark state visit from November 8-10, 2024, Indonesian President Prabowo Subianto was joined by Minister of Investment and Head of the Investment Coordinating Board (BKPM), Rosan Perkasa Roeslani, in an effort to bolster Indonesia-China relations. This first official visit underscores Indonesia’s commitment to enhancing partnerships with China, especially in investment, cultural, educational, and economic sectors. The comprehensive agenda and collaborative discussions during this visit represent a new era in diplomatic relations between the two nations.

Meeting with Chinese President Xi Jinping

During his visit, President Prabowo Subianto held a significant meeting with Chinese President Xi Jinping. The two leaders expressed a deep mutual respect and a desire to strengthen the bond that has connected Indonesia and China for centuries. President Prabowo emphasized the importance of maintaining and enhancing these relations, stating, “We have coexisted for centuries, and our societies and cultures have been intertwined for many years.” Both leaders highlighted shared values and a common vision for the future of their countries’ cooperation.

The discussions between President Prabowo and President Xi Jinping focused on fostering mutual benefits through collaboration. They discussed new avenues for investment, technology transfer, and social development, aiming to solidify a prosperous relationship that benefits both nations in the rapidly evolving global landscape.

Engaging with Chinese Premier Li Qiang and Zhao Leji

President Prabowo also engaged in discussions with Chinese Premier Li Qiang and Chairman of the National People’s Congress, Zhao Leji. These discussions, held separately at the Great Hall of the People, emphasized the strategic partnership between Indonesia and China across various sectors, such as education, poverty alleviation, and sustainable development.

The meetings reinforced both countries' determination to deepen their alliances in multiple fields, including education and social welfare. These dialogues further cemented Indonesia’s intention to work with China in building a foundation for future growth and long-term partnerships, emphasizing a joint approach to pressing global challenges like poverty reduction and environmental sustainability.

The Indonesia-China Business Forum (ICBF)

A pivotal part of the visit was the Indonesia-China Business Forum (ICBF) held in Beijing at The Peninsula Hotel, a gathering facilitated by the Indonesian Chamber of Commerce and Industry (KADIN) China Committee and the Indonesian Embassy in China. The forum saw participation from over 200 business leaders and senior executives from both China and Indonesia, marking a significant milestone in business diplomacy between the two nations.

The ICBF resulted in the signing of multiple Memorandums of Understanding (MoUs), cementing investment commitments valued at an impressive USD 10.07 billion. These agreements cover sectors including healthcare, biotechnology, manufacturing, renewable energy, food security, and finance. This business forum opened new doors for Indonesian and Chinese companies, enabling them to explore untapped opportunities and identify specific investment potentials that align with both countries’ economic objectives.

Rosan Perkasa Roeslani, Indonesia’s Minister of Investment, expressed optimism about the forum’s outcomes, noting, “China has consistently been one of the top investors in Indonesia. As stated by President Prabowo, the Indonesian government is committed to creating a conducive investment climate and providing adequate facilities for investors. This state visit marks a crucial moment for both countries to explore collaborative opportunities, particularly in sustainable investment and downstream industries.”

China’s Investment Footprint in Indonesia

China’s investment in Indonesia has steadily increased over the past decade, reflecting a deepening economic relationship. Indonesia and China first established diplomatic ties in 1950, and their economic engagement grew significantly after the implementation of the ASEAN-China Free Trade Area in 2010 and the Comprehensive Strategic Partnership in 2013. Since 2019, China has risen to become Indonesia’s second-largest foreign investor, demonstrating its critical role in Indonesia’s economic development.

Between 2019 and September 2024, Chinese investments in Indonesia reached USD 34.19 billion, representing approximately 18% of total foreign investments. The dominant sectors include basic metal industry (USD 14.39 billion, or 42% of total investment), transportation and telecommunications (USD 7.98 billion, or 23%), chemicals and pharmaceuticals (USD 3.18 billion, or 9%), electricity, gas, and water (USD 2.7 billion, or 8%), and industrial estates and office spaces (USD 2.21 billion, or 6%).

Regional Investment Distribution

Chinese investment in Indonesia is geographically diverse, with 67% of investments directed to regions outside Java and the remaining 33% within Java. Central Sulawesi leads with USD 12.54 billion (37%), followed by West Java with USD 7.19 billion (21%), North Maluku with USD 5.18 billion (15%), Jakarta with USD 1.66 billion (5%), and Banten with USD 1.34 billion (4%).

This state visit solidifies a strategic partnership with long-term impacts, especially in promoting investment opportunities that enhance Indonesia’s economic landscape. By fostering a sustainable investment environment, both nations pave the way for mutually beneficial growth.