October 18, 2023
BEIJING – Thirty-one private companies and state-owned enterprises (SOEs) from Indonesia signed agreements totaling US$13.7 billion with Chinese firms on Monday at the Indonesia-China Business Forum in Beijing, SOEs Minister Erick Thohir said.
“We want to be an industrial country that is part of the world’s supply chains,” Erick said in Beijing, in a YouTube video posted on Monday.
That sum was just a portion of potential deals totaling around $29 billion, he elaborated, adding that nine of the 31 companies were SOEs including electricity company PLN and the Indonesia Battery Corporation. He did not divulge the names of the seven other SOEs.
According to the minister, the Indonesia Battery Corporation has signed a partnership agreement with China’s Contemporary Amperex Technology Co. Limited (CATL) to build electric battery manufacturing facilities.
PLN would be teaming up with one or more unspecified Chinese electricity SOEs to make Indonesia’s electricity “greener”, Erick said. The signatories were also exploring the possibility of signing a separate agreement on building a hydropower plant.
“We need to push industrial development in Indonesia,” he said.
The SOEs minister is in Beijing as part of the delegation accompanying President Joko “Jokowi” Widodo at the Belt and Road Forum, which runs from Oct. 16 to 18.
President Jokowi was a witness of the deals, and expressed gratitude for China’s investment in Indonesia in his remarks at the signing ceremony on Monday.
“I want to say thank you for the investment, for [China’s] contribution to developing Indonesia,” Jokowi said, according to a press statement released on Tuesday by the Cabinet Secretariat.
The President also noted that, in 2013, China ranked just 12th in foreign direct investment (FDI) to Indonesia, with incoming funds amounting to $280 million. Now, a decade later, Chinese FDI to Indonesia amounts to $8.6 billion, according to Erick.
“If this [trend] is maintained, I am sure that, in the next year or two, China will be the biggest contributor of FDI to Indonesia, and I am looking forward to that,” Jokowi said in the statement.
Data from the Investment Coordinating Board (BKPM) show that Singapore is the top FDI source to Indonesia.
However, Investment Minister Bahlil Lahadalia has repeatedly pointed out that much of the investment from Singapore, as Southeast Asia’s financial hub, originated from elsewhere in the region.
In his remarks, Jokowi also sought to reassure investors about Indonesia’s 2024 general election, underlining that the country had held several elections since the end of the Soeharto era in 1998.
“So you don’t need to worry, you just need to hurry [and invest],” the President enthused.
“This is an investment opportunity that will be beneficial not only for Indonesia, but also for China. Because for Indonesia, any cooperation must be mutually beneficial, must be equally cuan [profitable],” he said.
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Many investors are preferring to “wait and see” instead of making big investment decisions, biding their time until the election dust settles and they can review the newly elected administration’s economic blueprint and related policies.