China OR West: Who Wins Indonesia’s Favor?

China and Indonesia strike $21.7 billion investment deal as Chinese Premier Li Qiang makes first overseas trip this year amid rising global trade tensions.

At a Glance

• Chinese Premier Li Qiang met with Indonesia’s President Prabowo Subianto, bringing 60 prominent Chinese businesspeople to Jakarta
• New investment agreements worth $21.7 billion were signed, following previous commitments of $44.89 billion
• China has been Indonesia’s largest trading partner for nine consecutive years
• Both nations agreed to conduct more bilateral transactions in local currencies
• Li will next travel to Malaysia for the ASEAN-GCC-China Economic Summit

Strategic Partnership Amid Global Tensions

Chinese Premier Li Qiang’s visit to Jakarta marks his first overseas trip of 2025, signaling China’s strategic prioritization of Indonesia in its regional economic partnerships. The high-profile visit included a delegation of 60 prominent Chinese business leaders, underscoring the commercial focus of the diplomatic mission. 

Both nations are seeking to expand their economic collaboration at a time when international trade faces significant challenges from protectionist policies elsewhere. This engagement comes as both countries maintain membership in key international economic forums including the G20 and BRICS, positioning them as influential voices in global economic governance.

During meetings with Indonesian President Prabowo Subianto, Li highlighted China’s resilient economic growth despite external challenges. He directly addressed the growing obstacles in the international trade environment, criticizing what he described as problematic trends. “The current international situation is a stalemate. 

Unilateralism and protectionism are on the rise, bullying behavior is increasing,” Li stated, framing the Indonesia-China partnership as a counterbalance to these developments.

Major Investment Agreements and Economic Cooperation

The visit produced tangible economic results with the signing of $21.7 billion in new Chinese investment agreements. This substantial commitment follows a previously established investment framework worth $44.89 billion, demonstrating the ongoing deepening of economic ties between the nations. 

China has maintained its position as Indonesia’s largest trading partner for nine consecutive years, with bilateral trade showing consistent growth. The relationship has been particularly strengthened through Belt and Road Initiative projects, including nickel smelting facilities and a high-speed railway system connecting major Indonesian population centers.

“I reiterate our commitment to strengthening our comprehensive strategic partnership with the people and the government of China. We see this will bring goodness not only to the two countries, but also to the entire Asian region,” stated President Subianto during the meetings. 

Multiple agreements were signed during the visit to enhance bilateral cooperation across various sectors. Notably, both countries committed to increasing transactions in their local currencies rather than using the US dollar, a move that reflects broader efforts to reduce dependence on Western financial systems. Indonesia also expressed its intention to expand the supply of raw materials to China’s rapidly growing electric vehicle manufacturing industry, leveraging Indonesia’s abundant natural resources to secure a position in global supply chains.

Historical Context and Future Regional Collaboration

Li’s visit coincided with the 70th anniversary of the Bandung Conference and the Non-Aligned Movement, adding historical significance to the diplomatic engagement. The Chinese Premier referenced this legacy, noting, “More than seven decades later, the world is once again at an important crossroads.” This historical framing positioned the current partnership as part of a longer tradition of solidarity among developing nations seeking to chart independent courses in international relations while calling for dialogue and peaceful coexistence to resolve international differences.

“More than seven decades later, the world is once again at an important crossroads,” emphasized Li during formal discussions with Indonesian officials. 

Following his meetings with President Subianto and Indonesian parliament members, Premier Li is scheduled to travel to Malaysia for the ASEAN-GCC-China Economic Summit. This broader regional engagement demonstrates China’s comprehensive approach to Southeast Asian economic partnerships and its strategic interest in building multilateral economic frameworks that advance its trade objectives. Indonesia’s Minister of Investment expressed optimism regarding the visit’s outcomes, highlighting opportunities for concrete cooperation in strategic sectors that align with both nations’ development priorities.