Jakarta. Indonesia says that technology transfer is one of the reasons why it enjoys partnering with China, as Jakarta works on developing its downstream industry.

“What I like about partnering with China is the technology transfer. They are willing to share their technologies. Without them, we would not have been able to export $34 billion [in 2022] from the nickel downstream industry,” Chief Investment Minister Luhut Binsar Pandjaitan told the China (Sichuan)-Indonesia Economic and Trade Conference in Jakarta on Monday.

“We do not have a national debt with China. It is all business-to-business [B2B],” Luhut said.

Indonesia is trying to shift from nickel ores to products of higher added value such as nickel sulfates, cathodes to even battery recycling. The country has imposed a full ban on exports of unprocessed nickel ores since Jan. 2020. 

Government data shows that Indonesia exported $34 billion worth of exports from the downstream nickel industry, of which $14.3 billion were iron and steel exports. The exports of the downstream nickel industry totaled an estimated $8 billion as of M3-2023 year-to-date.

Indonesia-China trade amounted to $133.6 billion in 2022. Indonesian exports to China also stood at $65.9 billion that year, according to the Trade Ministry. 

Luhut’s estimates revealed that China represented the largest market share —reaching 22.3 percent— for Indonesia’s top export destinations. Followed by the US (9.8 percent) and Japan (8.4 percent).

In 2014-2022, Chinese investment in Indonesia reached $30.8 billion with 15,906 projects. The accumulated total over the said period placed China in third place in the ranking of Indonesia’s top foreign investors. Chinese investment mostly went to the metal (non-machinery) and electronics industries, totaling $12.04 billion. Seconded by transport, storage and communication ($6.97 billion).

Last week, Indonesia inked a memorandum of understanding with Chinese electric vehicle (EV) giant BYD in Shenzhen. The MoU aims to explore the possibility of Chinese investment in Indonesia’s EV industry.

“We wish to develop the Indonesian EV ecosystem so [our country] would become Southeast Asia’s largest automotive market. [...] With abundant resources, strategic geographical location, and government support, I believe Indonesia has the key recipe to develop its domestic EV industry,” Luhut was quoted as saying in a press statement on the MoU with BYD.

Read More: Indonesia Attracts Rp 328.9 Trillion Investment in Q1-2023