Strengthening Industrial Cooperation Between Indonesia and China

Jakarta, INTI – Industrial cooperation between Indonesia and China continues to strengthen across various subsectors, capitalizing on investment opportunities in Indonesia. During a visit to the People's Republic of China (PRC) on June 12-13, 2024, Minister of Industry Agus Gumiwang Kartasasmita held a meeting with Minister of Industry and Information Technology (MIIT) of the PRC, Mr. Jin Zhuanglong, and his team. In the meeting, Minister Agus highlighted Indonesia's strategic business environment for Chinese companies to conduct their industrial activities.

During the discussions, both parties explored several industrial issues that could enhance bilateral cooperation, particularly in the automotive and petrochemical industries. Minister Agus noted that Chinese Battery Electric Vehicle (BEV) manufacturers significantly contribute to the development of the Electric Vehicle (EV) ecosystem in Indonesia.

"Out of the six BEV industries operating in Indonesia, four are Chinese BEV manufacturers. This not only demonstrates the Chinese industry's confidence in the Indonesian market but also strengthens the growing economic ties between our two nations," said Minister Agus in Beijing on Wednesday, June 12.

The potential for the EV industry in Indonesia remains vast. Aligning with government policies since 2019, the Indonesian automotive industry has started advancing environmentally friendly and low-emission technologies, prioritizing battery-based electric vehicles (BEVs).

Minister Agus emphasized that Indonesia is the most strategic choice as a production and export hub for electric vehicles, especially right-hand drive vehicles that can be exported to 54 countries. He encouraged Chinese electric car manufacturers to increase the automotive industry's export value by exporting BEVs and exploring the use of domestic Nickel Manganese Cobalt (NMC) battery cells.

Regarding the petrochemical industry, Minister Agus sees significant new investment opportunities, particularly for experienced investors in the petrochemical sector. Currently, the national petrochemical industry's capacity exceeds 14 million tons per year but still falls short of meeting domestic demand, leading to total petrochemical imports of 8.5 million tons valued at USD 9.5 billion. This is a significant increase from 7.75 million tons in 2022.

"We understand that the PRC is a global player in petrochemicals, successfully optimizing various oil and gas and coal resources into superior chemical products. Therefore, we warmly invite Chinese investors to invest in the petrochemical industry in Indonesia, and I assure ease of investment," Minister Agus asserted.

The industrial cooperation between Indonesia and China is well-realized, thanks to the support of both governments. During his visit to Beijing, Minister Agus held several meetings with Chinese entrepreneurs to discuss boosting industrial sector investment in Indonesia. The government's role is crucial in this regard. "Governments on both sides should play a role in encouraging this cooperation, especially for the private sector," said Agus.

Minister Agus also requested MIIT's cooperation in the semiconductor field, particularly in chip design, as discussed in the previous meeting in Shenzhen in 2023.

Kemenperin-MIIT Cooperation

Kemenperin and MIIT signed a Memorandum of Understanding (MoU) on Industrial Sector Cooperation during the ASEAN Summit on September 8, 2023, in Jakarta. The MoU covers a wide scope, including policies and regulations, photovoltaic industries, new energy vehicles, aircraft, lithium batteries, petrochemicals, and industrial zones.

"We hope that the agreement can be implemented soon, and discussions regarding the MoU on Advance Industry Cooperation can be finalized," Minister Agus explained. To further enhance bilateral cooperation, he proposed that Kemenperin and MIIT hold regular annual meetings.