China and Indonesia have solidified their partnership through a series of business agreements totaling $10 billion, announced during the Indonesia-China Business Forum in Beijing. This significant development came after a meeting between China’s President Xi Jinping and Indonesia’s President Prabowo Subianto. The leaders outlined their shared vision for strategic economic growth, focusing on sectors such as food, clean technology, biotechnology, and key issues like water conservation, maritime resources, and mining, particularly nickel. President Subianto emphasized the importance of collaboration over confrontation in achieving peace and prosperity in the modern era.
The joint statement released after the forum detailed plans to enhance cooperation in new energy vehicles, lithium batteries, photovoltaic projects, and the digital economy. Both countries committed to advancing the global energy transition, securing mineral resources, and ensuring stable supply chains. The discussions also highlighted Indonesia’s nickel industry, a crucial topic that led to fresh billion-dollar deals with Chinese partners.
Indonesia, a leading global nickel producer, has long been an attractive investment destination for Chinese companies. Notably, a groundbreaking agreement was reached between Chinese battery materials producer GEM Co., Ltd and Indonesia’s PT Vale to construct a high-pressure acid leaching (HPAL) plant in Central Sulawesi, valued at $1.42 billion. This partnership aims to secure nickel supplies essential for battery-grade materials. Additionally, major Chinese firms like Tsingshan Holding Group and Zhejiang Huayou Cobalt continue to dominate Indonesia’s nickel industry, reflecting confidence in Indonesia as a key supplier for electric vehicles, lithium-ion batteries, and green technologies.
Zhejiang Huayou Cobalt Co. is seeking $2.7 billion in financing for its battery-nickel plant in Indonesia, with support from Ford Motor Co. The financing deal, facilitated by HSBC Holdings Plc and Standard Chartered Plc, signifies a significant investment in Indonesia’s nickel industry. The Pomalaa plant in Southeast Sulawesi is set to become one of Indonesia’s largest HPAL projects, with an annual nickel production capacity of 120,000 tons. These developments are seen as a timely boost for the nickel market, which has been facing challenges due to low demand in the stainless-steel sector and sluggish growth in electric vehicles.
Indonesia’s nickel industry plays a pivotal role in the country’s economic strategy, attracting foreign investment to enhance domestic production and add value to its abundant natural resources. Despite market pressures, both Indonesia and China remain steadfast in their long-term objectives. As one of the world’s top producers of metallic commodities, Indonesia produced over half of the global mined nickel in 2023. The country’s cost-effective nickel industry has driven significant shifts in the market, maintaining steady production levels even as nickel prices fluctuate.
According to S&P Global Commodity Insights, Indonesia’s mined nickel production is projected to reach 2.1 million metric tons in 2024, surpassing 50% of the anticipated global output and doubling its 2020 levels. This rapid growth could potentially lead to a global supply shortage, pushing nickel prices back up to $28,000 per metric ton. Beyond the resources sector, China and Indonesia are expanding their collaboration into other areas such as technology, travel, and trade.
Reports indicate that prominent Indonesian technology company GoTo Gojek Tokopedia has signed agreements with Chinese giants Tencent and Alibaba to strengthen Indonesia’s digital infrastructure. These partnerships aim to advance cloud services, nurture local digital talent, and support Indonesia’s digital economy. President Subianto envisions transforming Indonesia’s tech landscape with investments in cutting-edge sectors like artificial intelligence and cloud computing.
In addition to industry agreements, China and Indonesia have agreed to streamline travel and visa policies, introducing measures like multi-entry long-term visas to facilitate bilateral exchanges, business trips, and tourism. The nations have also committed to deepening trade in agricultural products, including fresh coconuts. President Subianto secured export agreements during his visit, opening up new opportunities for Indonesian farmers and meeting China’s demand for tropical produce.
President Subianto’s decision to prioritize China as his first state visit underscores Indonesia’s determination to strengthen ties with Beijing. The $10 billion in deals focused on green energy and technology signifies a significant step towards deepening cooperation between the two nations, paving the way for mutual growth and prosperity.
