China, Indonesia power the next stage of development

For years, the China-Indonesia relationship has been measured in billions: investment, trade, infrastructure projects and industrial ventures. But Chinese Foreign Minister Wang Yi's visit to Jakarta last week suggested that the relationship is entering a new phase.

The numbers remain significant. Chinese foreign direct investment into Indonesia reached US$3.9 billion in the first half of 2026, according to Indonesia's Ministry of Investment and Downstream Industry/ Indonesia Investment Coordinating Board (BKPM), placing China among the country's top three sources of foreign capital. But the significance of this capital goes beyond financial flows. Chinese investment is increasingly embedded in Indonesia's broader effort to strengthen infrastructure, develop downstream industries, expand manufacturing capacity and build new technological capabilities.

The Jakarta-Bandung High-Speed Rail, Southeast Asia's first, has become a symbol of this transformation, cutting travel time between Jakarta and Bandung to around 40 minutes. Chinese investment in nickel smelting and downstream processing has also supported Indonesia's ambition to move beyond the export of raw materials toward higher-value industrial production. Industrial estates and manufacturing projects have further expanded the country's production capacity and connected Indonesia more deeply with regional and global supply chains.

This is important because Indonesia's development strategy is not simply about attracting foreign capital. It is about using investment to accelerate domestic industrialization. China's role in this process is therefore significant not because Indonesia depends on a single external partner, but because Chinese capital, technology and market access can complement Indonesia's own development priorities.

The partnership is now moving into areas that will shape Indonesia's next stage of development. During Wang Yi's visit, the two sides agreed to establish a China-Indonesia Energy Forum to deepen cooperation in energy and minerals, and expand cooperation in emerging fields including artificial intelligence and satellite communications, while working together through the newly established World Artificial Intelligence Cooperation Organization. These developments suggest a relationship moving beyond physical infrastructure toward energy security, technological capability and the industries of the future.

Just as important is the institutional architecture being built around the relationship. Wang Yi's visit marked the first meeting of the China-Indonesia Comprehensive Strategic Dialogue, a mechanism established in 2025 to provide a broader framework for bilateral cooperation. The two countries also held the second round of their 2+2 Foreign and Defense Ministers' Dialogue, the first mechanism of its kind that China has established with another country. Both sides agreed to prepare a new five-year action plan for 2027–2031, giving the partnership a longer-term framework rather than leaving cooperation dependent on individual projects or political visits.

This institutionalization may ultimately prove more important than any single investment figure. Infrastructure can be built and factories can be expanded, but institutions determine whether cooperation can be sustained, coordinated and adapted as economic conditions change. The growing network of dialogues, forums and joint mechanisms gives China-Indonesia relations a structure capable of supporting cooperation across multiple sectors and over successive political cycles.

The relationship is also becoming more reciprocal. Indonesia welcomes greater Chinese investment and technology, while China has expressed interest in expanding market access for Indonesian commodities. Such complementarity matters. Indonesia brings a large and growing market, abundant natural resources and an increasingly important manufacturing base; China brings capital, technology, industrial expertise and access to one of the world's largest consumer markets. The opportunity lies in connecting these strengths rather than treating them as competing interests.

This is also what gives the partnership significance beyond the two countries. For other nations across the Global South, the China-Indonesia experience offers a possible model of how developing economies can use international partnerships to accelerate their own development priorities while retaining agency over their national strategies. The lesson is that mutually beneficial economic cooperation can expand the policy space available to developing economies.

The significance of Wang Yi's visit therefore extends well beyond the bilateral relationship. Both sides agreed to strengthen strategic coordination within multilateral platforms such as the UN, APEC and BRICS, advocating an equal and orderly multipolar world and an inclusive globalization that benefits all. They also reaffirmed their commitment to jointly uphold the Bandung Spirit, oppose external interference and take their destinies into their own hands. As Wang Yi put it, openness leads to progress, while isolation leads only to backwardness.

China-Indonesia relations are evolving into a broader development partnership built around capital, industrialization, technology and institutions. For Indonesia, the opportunity is to turn that partnership into stronger domestic capabilities. For China, it is an opportunity to deepen a relationship with one of Southeast Asia's most important economies. And for the wider Global South, it offers an example of how two major developing countries can work together to pursue development while maintaining their own strategic choices.

The next chapter of China-Indonesia relations will not be defined simply by how much the two countries invest in each other, but by what they are able to build together.

Danifansen Simanjuntak is a senior planner at the Ministry of National Development Planning (BAPPENAS), Indonesia.

The views don't necessarily reflect those of China Daily.

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