Chinese Premier Pledges $21.7 Billion Investment in Indonesia to Bolster Economic Ties

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On his recent state visit to Jakarta, Indonesia, Chinese Premier Li Qiang pledged a hefty sum of US$21.7 billion in new investments from China in an endeavor to strengthen the political and economic ties between the two nations.

Premier Li, who arrived in Jakarta the previous Tuesday, was in the country to participate in the three-day summit of the Association of Southeast Asian Nations in addition to meeting with various works esteemed Indonesian leaders.

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President Joko Widodo welcomed the Chinese Premier at the stately Merdeka Palace, a considerable embodiment of colonial architecture. The two leaders deliberated over ways in which they could bolster trade and investment. Of prime concern to President Widodo was securing China’s assistance in relocating Indonesia’s capital from the densely populated and polluted areas of Jakarta on Main Java Island to Nusantara on the comparatively less populated Borneo Island.

Following this significant bilateral meeting, Foreign Minister Retno Marsudi emerged with the announcement of the latest Chinese investment pledge. This pledge comes on the heels of a previous commitment of US$44.89 billion, made when President Widodo met with Chinese President Xi Jinping back in July. Although the specifics of these new investments remain unclarified, Marsudi announced President Widodo’s plea to China – Indonesia’s primary trade and investment partner – to fulfill these pledges promptly. Beyond that, he encouraged them to consider investments in other sectors, such as maritime and fisheries.

Amongst the shared visions of the two leaders was the formalization of six key agreements. These encompassed various sectors ranging from e-commerce and enterprise support to industrial cooperation, agriculture, fisheries, and even science and technology, as confirmed by Marsudi.

During his trip, Premier Li had the opportunity to test ride the newly built US$7.3 billion high-speed rail line in Indonesia, primarily financed through Chinese loans. Functioning as a conduit between Jakarta and Bandung, the densely populated capital of West Java province, this project is part of China’s ambitious Belt and Road Infrastructure Initiative.

Touted as Southeast Asia’s first high-speed railway, the upcoming commercial service scheduled to commence on October 1 will slash travel time between the two cities. From the prevailing three hours, the journey will now take a mere 40 minutes.

Indonesia harbors aspirations of having a larger role in supplying nickel and other crucial raw materials to China’s burgeoning electric car industry. Specifically, nickel smelting plants in Indonesia, funded as a part of China’s Belt and Road transnational development program.

Both Indonesia and China are members of the influential Group of 20, a congregation of major developed and emerging economies. Following their fruitful discussions in Jakarta, both leaders left for New Delhi on Friday afternoon to attend the G20 summit.