China and Indonesia agreed to deepen defense and economic cooperation during high-level talks in Jakarta on Friday, signaling closer alignment amid regional security tensions and resource-driven trade ties.
The agreements follow a rare joint naval exercise last week east of Taiwan involving Chinese and Indonesian forces, alongside counterparts from Japan and the United States. Defense ministers Dong Jun of China and Sjafrie Sjamsoeddin of Indonesia outlined plans to expand joint exercises, officer exchanges and defense-industry partnerships, with both sides describing the cooperation as increasingly substantive and effective.
Economic collaboration will focus on artificial intelligence, green energy, satellites, rail transport, fisheries, minerals and energy, according to statements from both governments. Indonesia, a $1.4 trillion G20 economy, holds substantial reserves of nickel, tin, copper, gold and bauxite, while serving as the world’s largest exporter of palm oil and thermal coal. China remains a key buyer of Indonesian commodities and a dominant investor in the country’s nickel processing sector.
The diplomatic outreach comes as Jakarta seeks to balance relations with Beijing and Washington amid regional geopolitical frictions, including in the South China Sea. President Prabowo Subianto has maintained Indonesia’s long-standing policy of non-alignment, often described as ‘free and active.’
Relations have faced recent strains, however, with Chinese businesses in Indonesia complaining of regulatory burdens, alleged corruption and higher costs. In May, companies operating in the country, including those represented by the China Chamber of Commerce in Indonesia, urged Jakarta to adopt more business-friendly policies, citing excessive enforcement, new taxes and a revised nickel pricing formula as key concerns. Chinese investment in Indonesia reached $3.9 billion in the first half of 2026, according to available data.
China’s Foreign Minister Wang Yi framed the cooperation as a response to ‘unilateralism and hegemonic acts’ threatening global stability, while emphasizing Beijing’s commitment to elevating bilateral ties. Indonesian defense analyst Curie Maharani noted that Jakarta has observed how major powers increasingly leverage defense diplomacy as a tool of influence projection.
The agreements underscore the strategic importance of Indonesia’s resource base to China’s industrial and energy security ambitions, even as Jakarta navigates complex regional dynamics.
