The Indonesia-China Business Forum, held on the sidelines of the third Belt and Road Forum for International Cooperation in Beijing last week, has produced cooperation agreements between Indonesian and Chinese companies totaling US$13.7 billion. The cooperation agreements involved both state-owned and private companies, with many of the agreements focusing on the energy sector.

According to State-Owned Enterprises (SOEs) Minister and ad interim coordinating maritime affairs and investment minister Erick Thohir, the forum saw the signing of US$13.7 billion deals between 31 Indonesian companies and their Chinese counterparts. Erick added that out of the 31 companies, nine were state-owned.¹ 

The Indonesia-China Business Forum, said the minister, is aimed at strengthening the development of green energy, the electric vehicle (EV) battery industry and health technology to increase job opportunities in Indonesia. The focus of the forum largely on the energy sector is not without reason as Arya Sinulingga, special staffer to Erick, explained that cooperating with China in this sector was being intensified because China is the world’s leading renewable energy producer.

Two out of the dozens of Indonesian companies that signed billion-dollar deals with Chinese companies during the forum were state-owned electricity company PLN and state-owned battery holding company Indonesia Battery Corporation (IBC). According to Erick, the battery holding company had signed a partnership with China’s Contemporary Amperex Technology Co. Limited (CATL) to build EV battery manufacturing facilities in the country.² 

On the other hand, PLN reported it had signed memorandum of understanding (MoU) with several Chinese financial institutions and corporations, including the Export-Import Bank of China, Sinosure, Bank of China, Industrial and Commercial Bank of China, State Development & Investment Corp. Ltd, Huawei Tech Investment, and China Energy International Group for various projects. The total value of this collaboration, including funding and guarantees, amounts to US$54 billion.

PLN would also work together with two major Chinese renewable energy companies State Grid Corporation of China (SGCC) and Trina Solar China. With the SGCC, the cooperation is expected to encompass joint studies on utilizing renewable energy, electricity storage facilities, power network integration and smart network management, all of which are aimed at enhancing the country’s power system into one that is reliable, high-quality and cost-effective.³ 

Meanwhile, PLN’s cooperation with Trina Solar will see the development of the largest solar cell and panel manufacturing facility in Indonesia, located in the Kendal Industrial Zone in Central Java. The factory will be developed through a joint venture between subsidiary PLN Indonesia Power Renewables, Trina Solar, Sinar Mas and Agra Surya Energi. PLN CEO Darmawan Prasodjo said the joint venture would produce solar PVs for Indonesia, with the ultimate goal of supplying large-scale solar PV projects in the country.⁴ 

The third Belt and Road Forum for International Cooperation was celebrated to mark the 10th anniversary of the Belt and Road Initiative (BRI), during which President Joko “Jokowi” Widodo expressed his appreciation for the investment and contribution of Chinese businesses in Indonesia’s development. Aside from the Indonesia-China Business Forum’s focus on cooperation partnerships in the energy sector, Jokowi along with Chinese President Xi Jinping discussed potential partnerships in other sectors. Jokowi had voiced his hopes for an increase in investment between the two countries in the new capital city Nusantara, petrochemical and steel industries and tourism.⁵