China, Indonesia Deepen Military and Tech Ties as US$3.9 Billion FDI Tests Jakarta's Balance
Updated
Updated · CNA · Aug 21
China, Indonesia Deepen Military and Tech Ties as US$3.9 Billion FDI Tests Jakarta's Balance
3 articles · Updated · CNA · Aug 21
Summary
Jakarta and Beijing agreed at a 2+2 meeting to expand cooperation in defence, minerals, energy and technology, with Indonesia framing the move within President Prabowo Subianto's non-aligned foreign policy.
Defence ministers said the military relationship will widen through joint exercises, officer exchanges and defence-industry partnerships, building on earlier plans for technology transfer and deeper security cooperation.
Economic cooperation will span artificial intelligence, rail, green energy, satellites and fisheries, while China remains a major investor with US$3.9 billion in Indonesian FDI in the first half of 2026.
That investment push still faces friction: Chinese firms in May complained that higher taxes, a new nickel pricing formula and alleged over-enforcement were raising costs and threatening projects.
The closer ties come amid South China Sea tensions and scrutiny after a rare China-Indonesia naval drill east of Taiwan, underscoring Jakarta's effort to engage both Beijing and Washington.