Indonesia and China Expand Industrial Cooperation With $2.19 Billion Investment Package

Sixteen Projects Link Traditional Industry With New Technology

Indonesia and China have agreed on 16 investment projects worth $2.19 billion, or Rp36.4 trillion, combining industries such as basic metals and seafood processing with drones, batteries and artificial intelligence. The package expands cooperation under the Twin Country-Two Park (TCTP) framework, which connects industrial development in the two countries.

Coordinating Minister for Economic Affairs Airlangga Hartarto announced the projects in a statement on Monday. The agreements cover basic metals, meat and seafood processing, textiles, tea, furniture, drones, batteries and artificial intelligence. Their range reflects Indonesia's effort to develop established manufacturing industries while attracting investment in more advanced technology.

Airlangga said the scale of the Indonesian and Chinese markets, together with their industrial capabilities, creates substantial opportunities for businesses. He described the agreement as a milestone in cooperation between the two countries.

This is truly an important milestone that demonstrates how open and expansive collaboration between the two countries can be. It is a large market that offers opportunities for companies and for both nations.

The projects follow a memorandum of understanding signed in May 2025 by Airlangga and China's Commerce Minister Wang Wentao. Indonesian President Prabowo Subianto and Chinese Premier Li Qiang witnessed the signing. The memorandum provides the framework for developing industrial cooperation, encouraging investment across borders and bringing Indonesian and Chinese supply chains closer together.

Indonesia is also seeking cooperation beyond the industries covered by the 16 projects. Airlangga identified infrastructure, logistics, downstream industries, manufacturing, renewable energy, the digital economy, artificial intelligence, quantum computing, food security, healthcare and human capital development as areas open to broader collaboration.

The package brings those ambitions into a concrete set of investments. It also sits within a larger relationship that includes industrial parks, trade, infrastructure development and Indonesia's push to attract the capital needed for faster economic growth.

What the Investment Package Means for Indonesian Industry

Basic metals, meat and seafood processing, textiles, tea and furniture connect the new investment package to Indonesia's established production and export activities. Processing industries can increase the value of materials inside Indonesia before those products reach international markets.

Indonesia calls this approach downstreaming. In simple terms, it means doing more of the work that turns a raw material into a useful product before selling it abroad. A country that processes its resources can capture more of their value than one that mainly exports them in their raw form.

The investments fit the government's longstanding policy of downstream industrial development. The TCTP framework is intended to support this work in manufacturing and industries based on natural resources, while linking production and investment between Indonesia and China.

Drones, batteries and artificial intelligence add a different dimension. These sectors involve more advanced manufacturing, specialized skills and research capabilities. Partnerships with Chinese companies may help transfer technology and develop a local workforce able to use and build these systems.

Indonesia's effort to broaden its industries also addresses reliance on commodities. Commodity prices can rise and fall sharply, affecting the income earned from exports. Developing a wider mix of manufacturing and technology activities can help reduce that dependence and support Indonesia's ambition to become a center for innovation in Southeast Asia.

Batteries Connect the Deal to Indonesia's Nickel Ambitions

Indonesia holds the world's largest nickel reserves and wants to become a major participant in the global supply chain for electric vehicles. Nickel is a critical component for batteries, making battery production an important part of the country's industrial plans.

Investment in batteries offers a route from supplying raw nickel ore toward making finished battery cells for electric vehicles. That would place more stages of production inside Indonesia and allow the country to earn value from manufacturing as well as from its natural resources.

Indonesia's goal of becoming a developed economy by 2045 gives this transition a wider purpose. Moving into products that require more technology and expertise is part of its effort to build an economy with greater industrial capacity.

Artificial intelligence and drone technology similarly require skills beyond the extraction or basic processing of resources. The cooperation described by Airlangga links those technological ambitions with investment in the traditional industries that continue to support Indonesia's export economy.

How the Twin Parks Framework Works

The TCTP initiative, also known as Two Countries Twin Parks, was launched in 2021. It connects industrial areas in Batang, Bintan and Semarang in Indonesia with the Yuanhong Investment Zone in China's Fujian Province.

The framework is designed around the different strengths of the two economies. Indonesian industrial parks offer resources, labor and access to the ASEAN market. Their Chinese counterparts provide technology, capital and connections to supply chains.

A supply chain is the series of activities needed to make and deliver a product, from obtaining materials to manufacturing and distribution. Linking those activities across the two countries is intended to make it easier for businesses to invest and organize production.

TCTP also connects Indonesia's Global Maritime Fulcrum initiative with China's Belt and Road Initiative. The industrial parks provide a shared setting for the two countries' plans for regional economic development.

Several developments led to the latest package:

• 2021: The TCTP initiative was launched, linking industrial areas in Indonesia with the Yuanhong Investment Zone in Fujian.
• November 2024: President Prabowo Subianto made a state visit to Beijing, giving fresh momentum to business and trade cooperation.
• March 2025: Indonesia signed a deal with China State Construction Engineering Corporation to develop the Batang Industropolis Special Economic Zone.
• April 2025: A Joint Committee met to discuss cooperation policies for the Batang zone.
• May 2025: Airlangga Hartarto and Wang Wentao signed the TCTP memorandum of understanding, witnessed by Prabowo and Li Qiang.
• Monday, in the announcement covered by the January 16, 2026 article: Airlangga outlined 16 investment projects worth $2.19 billion.

Batang Provides Space for a Larger Industrial Expansion

The Batang Industropolis Special Economic Zone is a major component of the cooperation framework. Indonesia's March 2025 agreement with China State Construction Engineering Corporation concerns development of the zone, with projected investment estimated at Rp60 trillion.

The Rp60 trillion estimate for Batang is larger than the Rp36.4 trillion value of the newly announced 16 projects. The figures describe the scale of the industrial zone development and the latest investment package, respectively.

The Batang project will prepare 500 hectares for the Indonesia-China TCTP framework. This is intended as an initial step toward accelerating investment in manufacturing and advanced technology by providing the physical space and infrastructure businesses need.

The zone is expected to attract companies in banking, infrastructure, logistics, energy, automotive production, agriculture, battery manufacturing, telecommunications, electronics and aviation maintenance. That mix extends beyond factory production to services and infrastructure that support industrial operations.

The Joint Committee meeting in April 2025 addressed cooperation policies for the zone. Together with the government agreements, that coordination indicates strong political support for developing the industrial parks and turning bilateral cooperation into investment activity.

Trade and Diplomacy Give the Package a Wider Setting

Indonesia and China established diplomatic relations on April 13, 1950, and marked their 75th anniversary in 2025. Their relationship has developed through different phases and, in recent years, matured into a comprehensive strategic partnership.

China is Indonesia's largest trading partner. Bilateral trade reached approximately $135.2 billion in 2024. Indonesia mainly exports commodities such as nickel, coal and palm oil to China, while importing machinery, electronics and consumer goods.

The trade pattern helps explain Indonesia's interest in doing more processing and manufacturing at home. The investment package offers opportunities to develop industries alongside the existing flow of resources and finished goods between the countries.

Prabowo's November 2024 state visit to Beijing set the stage for closer business and trade cooperation, guided by the Spirit of Bandung. Both governments have stressed the role of businesses in advancing the relationship, particularly during global instability.

Indonesian Ambassador to China Djauhari Oratmangun described his hopes for the relationship as it develops amid international challenges.

I envision a relationship that continues to mature, deepening its roots in mutual respect and understanding amid the growing global challenges and uncertainties.

The two countries have also expanded their cooperation framework by adding security as a fifth pillar. It joins politics, the economy, maritime cooperation and exchanges between people, extending the relationship beyond trade and investment.

Investment Supports Indonesia's Growth Target

President Prabowo's government is seeking substantial foreign direct investment to help reach its target of 8% economic growth. Foreign direct investment means capital put into businesses or operations in another country, including industrial facilities.

Indonesia's target requires large capital inflows into infrastructure, industry and digitalization. Chinese companies have substantial expertise and capacity in those areas, making China an important investment partner for Indonesia's modernization plans.

China, in turn, gains access to Indonesia's large domestic market, its strategic location within ASEAN and resources needed by Chinese industries. Indonesia gains a source of capital and technology for developing its own industrial capabilities.

The 16 projects reflect that practical economic relationship. Their mix of processing, manufacturing and technology connects the immediate investment announcement with Indonesia's wider plans for growth, industrial development and a more varied economy.

Renewable Energy and Food Security Broaden Cooperation

Indonesia's solar, geothermal and hydro resources create opportunities for cooperation with China, a leader in renewable technology. Joint ventures in solar panel manufacturing and renewable energy power generation are already underway.

These projects support Indonesia's transition toward cleaner energy and contribute to global goals for reducing emissions. Renewable energy is also among the areas Airlangga identified for broader cooperation beyond the current investment package.

Food security is another priority. A growing global population and changing climate patterns make maintaining a stable food supply more difficult. Indonesia and China are working together to improve agricultural productivity and food processing technologies.

Indonesia's edible bird's nest industry provides an existing example of the commercial relationship. Indonesia is the world's largest producer of edible bird's nests, a luxury health product highly prized in China. Trade in the commodity has grown to hundreds of millions of dollars annually.

That trade illustrates how Indonesian production can serve demand in China. The new investments in meat and seafood processing add other food industries to the expanding cooperation, alongside the wider work on agricultural productivity and food security.

Healthcare and Digital Services Offer Further Opportunities

Healthcare cooperation has become more relevant in the period following the pandemic. China is a major producer of vaccines, biopharmaceuticals and medical devices. Biopharmaceuticals are medicines made using biological materials or processes.

Cooperation includes training medical personnel, establishing sister hospitals and increasing investment in pharmaceutical manufacturing. Sister hospital arrangements connect institutions so they can cooperate and share knowledge. These activities can help Indonesia strengthen its ability to meet healthcare needs while giving Chinese companies access to a large market.

Indonesia's digital economy provides another area for expansion. Internet penetration has reached 77% of the population, creating a large market for digital services. Chinese companies are already active in commerce conducted online, services for booking rides and financial technology in Indonesia.

Future collaboration is expected to focus on smart city solutions, data centers and cloud computing infrastructure. Smart city systems use digital technology to support urban services, while data centers house the computing equipment that stores and processes information. Cloud computing allows users to access computing services over the internet.

Investment in these areas would support Indonesia's vision of a digital society and provide Chinese technology firms with a platform for growth in Southeast Asia. Airlangga's wider list also includes quantum computing and human capital development, connecting future technological cooperation with the training and skills needed to support it.

The current package covers 16 projects across named sectors, while the broader agenda extends to additional fields. No timetable was given for new agreements in those wider areas of cooperation.

The Essentials

• Indonesia and China agreed on 16 investment projects worth $2.19 billion, equivalent to Rp36.4 trillion.
• The projects cover basic metals, meat and seafood processing, textiles, tea, furniture, drones, batteries and artificial intelligence.
• The package follows a TCTP memorandum signed in May 2025 by Airlangga Hartarto and Wang Wentao.
• Launched in 2021, TCTP links Batang, Bintan and Semarang with the Yuanhong Investment Zone in Fujian Province.
• The Batang Industropolis Special Economic Zone has projected investment of Rp60 trillion and will prepare 500 hectares for the framework.
• China is Indonesia's largest trading partner, with bilateral trade of approximately $135.2 billion in 2024.
• Indonesia is seeking foreign investment to support its 8% economic growth target and its goal of becoming a developed economy by 2045.
• Renewable energy, food security, healthcare and digital services are among the areas for broader cooperation.
• Indonesia and China established diplomatic relations on April 13, 1950, and marked 75 years of ties in 2025.