Jakarta, Indonesia – July 23, 2026 – Indonesia has successfully inked business agreements worth US$2 billion (approximately Rp 35.87 trillion, based on an exchange rate of Rp 17,936 per US dollar) with China. These pivotal deals were finalized during a high-profile business forum held at the office of the Coordinating Ministry for Economic Affairs today, bringing together representatives from both nations’ private sectors. The agreements underscore a deepening economic partnership, particularly in critical emerging and future-oriented sectors.
The forum, a testament to the robust and evolving bilateral ties between Jakarta and Beijing, saw the participation of approximately 30 leading Chinese companies. These firms, curated by the Indonesian Embassy in Beijing, represent advanced fields ranging from future technology and innovation to renewable energy and healthcare. Djauhari Oratmangun, the Indonesian Ambassador to China, highlighted the strategic intent behind inviting these specific sectors, emphasizing Indonesia’s commitment to economic transformation and sustainable development.
A Deep Dive into the US$2 Billion Agreement
The US$2 billion in agreements encompasses a diverse portfolio of new investments and collaborative ventures designed to inject significant capital and technological expertise into Indonesia’s economy. These commitments are not merely financial transactions but represent strategic partnerships aimed at fostering innovation, creating high-value jobs, and enhancing Indonesia’s competitiveness on the global stage. The focus on future technology, innovation, renewable energy, and health sectors aligns seamlessly with Indonesia’s long-term economic development blueprint, often referred to as "Indonesia Emas 2045" (Golden Indonesia 2045), which envisions the nation becoming a developed and prosperous economy by its centenary.
Ambassador Oratmangun elaborated on the nature of these agreements, stating, "I am here with around 30 companies from China operating in future technology, innovation technology, and secondly, in renewable energy, focusing on energy transformation. There are also several in the health sector." He added that these partnerships were a direct outcome of the meticulously organized business forum, which provided a platform for direct engagement between Indonesian and Chinese enterprises. The substantial sum of US$2 billion reflects the tangible outcomes and mutual trust cultivated through these interactions.
Strategic Sectors Driving Future Growth
The selection of future technology, renewable energy, and healthcare as primary investment areas is highly strategic. For Indonesia, these sectors are vital for transitioning from a resource-dependent economy to a knowledge-based, high-tech industrial powerhouse.
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Future and Innovation Technology: This category includes advanced manufacturing, artificial intelligence (AI), big data analytics, cloud computing, and smart infrastructure. Chinese companies are at the forefront of many of these innovations, and their investment in Indonesia is expected to catalyze local technological capabilities, foster a vibrant startup ecosystem, and facilitate digital transformation across various industries. This aligns with Indonesia’s aspirations to become a leading digital economy in Southeast Asia. Investments could range from establishing research and development centers to building data infrastructure and supporting local tech ventures.
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Renewable Energy: Indonesia, with its vast natural resources, possesses immense potential for renewable energy generation, including solar, geothermal, hydro, and wind power. As the country commits to achieving its Nationally Determined Contributions (NDCs) under the Paris Agreement and aims for net-zero emissions, Chinese expertise and capital in renewable energy projects are crucial. The agreements are expected to accelerate the development of new clean energy infrastructure, support the electric vehicle (EV) ecosystem, and contribute to Indonesia’s energy transition roadmap, reducing its reliance on fossil fuels. This sector not only promises environmental benefits but also significant economic opportunities in manufacturing, installation, and maintenance.
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Healthcare: The pandemic underscored the critical importance of a resilient healthcare system. Investments in this sector could cover pharmaceutical manufacturing, medical device production, digital health solutions, and healthcare infrastructure development. China has a robust and rapidly advancing healthcare industry, and collaboration can enhance Indonesia’s capacity to provide accessible, high-quality healthcare services to its large population, addressing issues like disease prevention, treatment, and medical research. This also aligns with Indonesia’s efforts to reduce its dependence on imported medical supplies and pharmaceuticals.
Bilateral Trade and Investment: A Trajectory of Growth
The recent agreements are built upon a foundation of steadily expanding trade and investment between Indonesia and China. Ambassador Oratmangun provided a comprehensive overview of the escalating economic relationship, showcasing impressive growth metrics.
"Last year, trade between Indonesia and China stood at approximately US$168 billion," Djauhari stated. "This year, up to June, it has already reached US$101 billion, according to Chinese customs data, with a surplus for Indonesia of US$5.6 billion." This significant surplus for Indonesia is a positive indicator, demonstrating the growing demand for Indonesian commodities and manufactured goods in the Chinese market. It also reflects Indonesia’s efforts to diversify its exports beyond raw materials, including value-added products.
Furthermore, Chinese investment in Indonesia has shown remarkable acceleration. "The value of investment from China to Indonesia has now approached US$10 billion up to June, and we hope this positive trend continues until the end of the year," he added. China consistently ranks among the top foreign direct investors in Indonesia, playing a crucial role in infrastructure development, manufacturing, and resource processing industries. This investment inflow is vital for job creation, technology transfer, and overall economic expansion, contributing directly to Indonesia’s national development goals. The robust investment figures underscore the confidence of Chinese businesses in Indonesia’s economic stability and growth prospects.
Facilitating Transactions: The Role of Local Currency Settlement and QRIS
Beyond traditional trade and investment, Indonesia and China are also making significant strides in enhancing financial connectivity and efficiency. A key initiative is the implementation of the Local Currency Settlement (LCS) framework, which allows bilateral trade and investment transactions to be settled in Rupiah and Yuan, bypassing the need for a third currency like the US dollar.
Djauhari highlighted the success of this framework, noting, "Our business activities using Rupiah and Yuan have seen an increase of over 200% from January to June 2026, based on data from Bank Indonesia." This substantial growth signifies a strong uptake by businesses, reducing exchange rate risks and transaction costs, thereby making cross-border trade and investment more attractive and stable. The LCS framework is part of a broader regional effort to strengthen financial resilience and reduce reliance on major international currencies, providing greater autonomy in monetary policy.
In a move set to revolutionize tourism and small-scale trade, Indonesia’s Quick Response Code Indonesian Standard (QRIS) payment system has been fully integrated across mainland China since May 2026. "The latest is that QRIS, since last May, can be used across mainland China. So, if you go there, you don’t need to carry cash anymore; you can use QRIS," Djauhari explained. This integration allows Indonesian tourists and business travelers to make payments directly from their mobile banking apps using QRIS, offering unparalleled convenience and security. Conversely, it also paves the way for Chinese tourists in Indonesia to use their domestic QR payment systems, fostering greater people-to-people exchange and boosting tourism revenues for both nations. This seamless payment connectivity is a significant step towards greater financial interoperability.
Official Endorsements and Strategic Outlook
The Indonesian government views these partnerships as central to its long-term economic strategy. Ambassador Djauhari Oratmangun’s statements reflect Indonesia’s proactive diplomacy in attracting high-quality investment and fostering mutually beneficial relationships. His emphasis on future-oriented sectors like renewable energy and innovation technology aligns with President Joko Widodo’s vision for Indonesia to leapfrog into advanced industrialization and a green economy. The Coordinating Ministry for Economic Affairs, by hosting such a crucial forum, underscores the government’s commitment to facilitating these strategic collaborations and ensuring a conducive business environment for foreign investors. The government’s consistent efforts in streamlining regulations, improving infrastructure, and investing in human capital are designed to maximize the benefits derived from these international partnerships.
Private Sector Enthusiasm and Partnership Imperatives
The enthusiasm from the private sector for these collaborations is palpable. Shinta Kamdani, Chairperson of the Indonesian Employers’ Association (Apindo), representing a vast network of Indonesian businesses, affirmed the readiness of local enterprises to engage with their Chinese counterparts. "We, the Indonesian business community, are ready to cooperate and forge partnerships with companies from China. China is a major trading and investment partner for Indonesia," Shinta stated. Her remarks highlight the strategic importance of China as not just a market, but also a source of capital, technology, and expertise.
Shinta also emphasized the vast untapped potential for further cooperation between the two countries, particularly within the framework of the agreements secured at the forum. She acknowledged that many Chinese companies have already established a significant presence in Indonesia and stressed the importance of ongoing support and collaboration. "Many have already invested their capital in Indonesia, and we need to oversee them, working together with Indonesian businesses to identify challenges and opportunities that we must continuously monitor," she explained. This collaborative approach, she added, is essential for ensuring that investments are sustainable, generate local benefits, and contribute to the overall economic development of Indonesia. Apindo’s role extends to advocating for a fair and transparent business environment, ensuring that these partnerships yield equitable benefits for both sides.
Broader Economic Implications for Indonesia
The US$2 billion in agreements, coupled with the ongoing robust trade and investment flows, carries significant broader economic implications for Indonesia:
- Job Creation and Human Capital Development: Investments in high-tech and renewable energy sectors will create new job opportunities, particularly for skilled labor. These projects often come with technology transfer clauses and training programs, enhancing the capabilities of the Indonesian workforce and fostering a culture of innovation.
- Technological Advancement and Industrial Diversification: By attracting leading Chinese firms in future technologies, Indonesia accelerates its technological absorption and upgrades its industrial base. This diversification reduces reliance on traditional sectors and positions Indonesia as a key player in emerging global industries.
- Energy Transition and Sustainability: The focus on renewable energy investments is critical for Indonesia’s energy security and environmental sustainability goals. These projects contribute to reducing carbon emissions, promoting green growth, and fulfilling international climate commitments.
- Infrastructure Development: While not explicitly detailed, investments often spill over into related infrastructure development, from logistics and transportation to digital connectivity, which further enhances the overall business ecosystem.
- Strengthening Global Value Chains: Strategic partnerships with Chinese companies can integrate Indonesian businesses more deeply into global and regional value chains, especially in high-growth sectors, enhancing export capabilities and market access.
- Regional Economic Leadership: By fostering dynamic economic ties with China, Indonesia reinforces its position as a key economic hub in Southeast Asia, attracting further international interest and investment.
Navigating the Geopolitical Landscape and Future Challenges
While the economic partnership with China presents immense opportunities, it also operates within a complex geopolitical landscape. Indonesia maintains a non-aligned foreign policy, seeking balanced relations with all major global powers. The deepening economic ties are strategically managed to ensure national interests are prioritized.
Potential challenges include ensuring fair labor practices, adherence to environmental standards, and maximizing local content requirements to prevent over-reliance on foreign inputs. Indonesia’s regulatory framework continues to evolve to address these aspects, aiming for partnerships that are truly mutually beneficial and contribute to sustainable development. Ongoing dialogue and transparent communication between both governments and private sectors will be crucial in mitigating any potential friction and fostering a relationship built on trust and shared objectives.
The Path Forward: Sustaining Momentum
The business forum and the resulting US$2 billion in agreements mark a significant milestone in the evolving economic relationship between Indonesia and China. They underscore a shared vision for growth, innovation, and sustainable development. As Indonesia progresses towards its "Golden Indonesia 2045" vision, strategic partnerships with global economic powerhouses like China will remain indispensable. The focus on future technologies, renewable energy, and healthcare, coupled with enhanced financial connectivity through LCS and QRIS, sets a promising trajectory for continued cooperation. The commitment from both governments and private sectors to nurture these alliances will be key to unlocking their full potential and ensuring long-term prosperity for both nations. Future forums and ongoing dialogues are expected to build upon this momentum, exploring new avenues for collaboration and solidifying the strategic economic partnership between Jakarta and Beijing.
