Jakarta. The government Wednesday claimed that China’s economic slowdown would not affect its investments in Indonesia amidst Beijing's plans to work on some major projects over the coming years.

China today is witnessing its growth forecasts trimmed. Reports showed that China could miss its annual 5 percent growth target. The news of China facing stalling growth sparked worries about its impact on Indonesia’s economy, including on Chinese investment in the Southeast Asian country.

“If God is willing, at least until the end of my ministerial post, I would say that there is nothing to worry about investments albeit China's economic slowdown,” Investment Minister Bahlil Lahadalia said at the Investor Daily Round Table forum in Jakarta on Wednesday evening.

According to Bahlil, the government had estimated how much Chinese investment would potentially enter Indonesia over the next 2 years. This includes battery giant CATL’s investment in a $6 billion electric vehicle (EV) battery ecosystem project. China is taking part in North Kalimantan’s industrial estate. Chinese glassmaker Xinyi Glass recently agreed to build a $11.5 billion glass and solar panel factory in Rempang, Batam. 

“Overseas investment that flows from China must obtain the Chinese government’s approval. We are also working with China's [Xinyi Glass] to build a glass and solar panel manufacturing plant that is poised to be the second-largest in the world after China. The approval process for all these investments is almost done,” Bahlil said.

It is unlikely for China to withdraw its investments from Indonesia halfway through, especially if the infrastructure works of their projects have made some progress. He added:  "If we speak of what would happen in the next 1-2 years, I can’t imagine that [Chinese investments] would stop halfway through. Especially if they have done 50-60 percent of the infrastructure work.”

Indonesia tries to not solely rely on China as foreign direct investment (FDI) from other countries increases. This includes Europe which rarely makes it into the top 10 of Indonesia’s foreign investors. American investors are also increasingly showing interest in Indonesia, according to Bahlil. He added: “And we are hoping to attract Middle Eastern investors.”

Government data shows China invested $8.2 billion in Indonesia throughout 2022. This makes China Indonesia’s second-largest investor after Singapore ($13.3 billion). China’s position also remains unchanged as of the January-June period 2023, during which Chinese investment had already totaled $3.8 billion. 

In 2022, European Union (EU) member Netherlands invested $1.2 billion: the 8th largest foreign investment that Indonesia saw that year. The US was Indonesia's fourth biggest foreign investor ($2.5 billion) in 2021 but then fell two spots ($3 billion) the following year. Middle Eastern nation the United Arab Emirates (UAE) ranked 32 out of 126 countries on the 2022 Indonesia's top foreign investor list. The UAE invested $22.9 million in Indonesia last year.

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