China, Indonesia agree to boost ties

Jakarta: China and Indonesia agreed on Friday to strengthen their military ties and collaborate on minerals, energy, technology, and artificial intelligence, as Jakarta navigates its relationships with both China and the United States amid economic and geopolitical tensions. Both nations should "seize the moment," said China's Foreign Minister Wang Yi, who is visiting Jakarta with his defence counterpart.

Wang emphasized that a unilateral approach and hegemonic actions hinder global cooperation and stability, and China is actively working to elevate China-Indonesia cooperation at a high level.

The two countries pledged to cooperate across various sectors, including artificial intelligence, defence, rail transport, green energy, satellites, and fisheries. Indonesia's President Prabowo Subianto supports a non-aligned foreign policy, pledging friendship with all countries, including China and the United States, a significant trade partner. China is the largest buyer of Indonesia's palm oil and thermal coal, contributing to its $1.4 trillion G20 economy.

Wang stated that both sides agreed to support each other's core interests and cooperate more in energy and mineral resources. China has a significant presence in Indonesia's nickel processing sector, but recent policy changes, such as export restrictions and mining quotas, have prompted some companies to seek alternatives.

Chinese Defence Minister Dong Jun received a military honour guard upon his arrival in Jakarta, meeting with his Indonesian counterpart Sjafrie Sjamsoeddin. The prospects for military cooperation are broad, with increased quality and effectiveness, according to Dong. Sjafrie highlighted increased defence activities, including joint exercises, officer exchanges, and partnerships in the defence industry.

Last week, Taiwan, which China claims as its territory, expressed anger over a rare joint military exercise between Chinese and Indonesian navies east of Taiwan. Indonesia's navy stated that the exercise was routine, conducted with other nations, including Japan and the United States. Defence analyst Curie Maharani noted that while Indonesia perceived the exercise as routine, the location allowed China to send a different political message.

Indonesia has also faced disagreements with China over the South China Sea, where Beijing claims almost the entire region. Jakarta maintains a measured stance, avoiding involvement in broader territorial disputes involving China and neighboring countries like the Philippines, Malaysia, and Vietnam. Despite China's substantial investment in Indonesia—converting $3.9 billion in foreign direct investment in the first half of 2026—regulations surrounding some investments have caused friction.

Chinese companies operating in Indonesia have urged the government to adopt more business-friendly policies, citing higher taxes, stricter regulations, and alleged corruption as issues.