Indonesian-Chinese Economic Relations Getting Closer, Strategic Collaboration Continues to Expand

JAKARTA - Bilateral relations between Indonesia and the People's Republic of China/China (PRC/PRC) continue to strengthen through cooperation in various strategic sectors, including trade, investment, industry, digital economy, and technology.

A series of meetings that have taken place in recent times are an important step to expand collaboration and strengthen economic partnerships that benefit both countries.

In order to strengthen these relations, Coordinating Minister for the Economy Airlangga Hartarto previously received a visit from the Deputy Governor of Fujian Province together with a delegation of Chinese business actors within the framework of the Two Countries Twin Parks (TCTP) cooperation and this meeting reflects the great interest of Chinese investors to expand their investment in Indonesia.

Previously, on July 16, 2026 in Shanghai, Airlangga also signed the World Artificial Intelligence Cooperation Organization (WAICO) Declaration, which places Indonesia as one of the founding countries of the global artificial intelligence cooperation organization.

"The report from the Japanese agency company, JETRO, conveyed that foreign companies investing in Indonesia have the potential to experience or benefit from 70 percent. So more profit than not profitable," said Coordinating Minister for Economic Affairs Airlangga Hartarto during a visit of honor to the RRT Business Delegation and RI Ambassador to RRT, quoted Friday, July 24.

In the field of trade, Indonesia and China have been bound by a number of important agreements, including the ASEAN-China Free Trade Area (ACFTA) which has been in effect since 2010 and the Regional Comprehensive Economic Partnership (RCEP) which has been effective since 2022.

Supported by the implementation of the two agreements, the bilateral trade value continues to show positive growth, based on Indonesian data, the trade value of the two countries reached around 154 billion US dollars, while according to Chinese data, the value was around 160 billion US dollars with Indonesia's main export commodities to China including ferroalloy, nickel matte, lignite, coal, and palm oil.

Besides being a major trading partner, China is also one of the largest sources of investment for Indonesia with an increasing contribution in various strategic sectors.

To accelerate the realization of investment, the Government of Indonesia provides various competitive fiscal incentives, such as tax holiday facilities of up to 100 percent according to investment criteria, tax allowance, investment allowance, and super tax deduction which aim to encourage investment, innovation, and human resource development.

"We are open to working with global partners including China, both for trade and investment as well as in the service sector and in the education sector. And I invite business entrepreneurs from China to continue investing in Indonesia, especially in sectors with high added value," he said.

Furthermore, in the education sector, cooperation with leading universities such as Tsinghua University has been realized through various research activities and seminars held in the Bali Special Economic Zone (KEK).

Meanwhile, in the automotive sector, the Government is also encouraging the strengthening of investments by Chinese automotive companies, such as BYD and Chery, which are now among the top five in the national automotive market share.

Meanwhile, in the digital economy sector, the Government continues to expand investment in the semiconductor industry, the development of optical fiber networks, the development of digital applications, and data center infrastructure (data center) as part of accelerating Indonesia's digital economic transformation.

On this occasion, Airlangga also held a dialogue with a number of Chinese business actors, and was also attended by representatives of Indonesian businesses from various sectors, including textiles, footwear, furniture, education, plastic packaging, industrial areas, electronics, to renewable energy.