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00:00Indonesia is ASEAN's largest economy
00:05and the world's most populous Muslim nation.
00:09China has been making significant inroads here.
00:30As Indonesia searches for new paths to economic growth,
00:34China will play a key role in those plans.
00:37The terminology of downstream is we would like to create more value-added.
00:41So how you create that is actually you build an ecosystem of industry
00:46that connected each minerals that we have in Indonesia.
00:51To create a lithium battery, you cannot only rely on nickel.
00:55You need lithium, you need cobalt, you need copper, you need aluminium.
01:00And Indonesia has almost all of it.
01:03If you see the whole religion of this lithium battery and electric vehicle,
01:07I would say China has the most advanced and efficient technology.
01:11But with tensions ongoing in the South China Sea,
01:15between China and several ASEAN countries,
01:18how might Indonesia navigate these choppy waters?
01:22China's strategy is that it would like to make other countries dependent upon them economically.
01:28At the same time, China would like to establish military dominance over them.
01:32Why should China have any military ambitions against Indonesia?
01:38In 2025, Indonesia deepens its military ties with China.
01:43I think there will be a discussion with China.
01:44I think it's always been a discussion that, let's try to look at it pragmatically.
01:51In the United States, I think there's always been the discussion that, let's try to look
02:06at it pragmatically.
02:10Indonesia is the world's most populous Muslim nation, and Southeast Asia's largest economy
02:16with a population of over 280 million.
02:21Its potential is immense.
02:27Analysts expect Indonesia to become one of the world's leading emerging markets over
02:31the next decade, with the size of its GDP projected to rise from 1.3 trillion in 2022
02:39to 4.1 trillion by 2035.
02:45In China's quest to win hearts and minds in the global south, it is of strategic importance.
02:53Indonesia is important in several ways.
02:57First of all, Indonesia is the largest Muslim country in the world.
03:01This in itself is very, very important.
03:05Secondly, Indonesia is straddling for a very long distance from the east to the west.
03:12So many islands involved will be always a very important geopolitical position.
03:20Indonesia, in my best judgment, has huge economic upside, and they want to move the capital
03:26city from Jakarta to the biggest island in the country.
03:32That will really involve a lot of hard work and engineering breakthroughs, a huge amount of capital
03:40investment.
03:41In Indonesia, you have the largest ethnic Chinese community, up to about 8 million people.
03:49The single largest ethnic Chinese diaspora, many of whom are Indonesian citizens, of course.
03:55But that also makes Indonesia as a very special country from the Chinese perspective.
04:07But how do Indonesians view China?
04:10Is it a reliable economic partner or a military adversary?
04:16China Coast Guard, China Coast Guard, Indonesian Coast Guard calling.
04:20Please move away and go back to your territory, sir.
04:28A survey in March 2024 showed that nearly three-quarters of Indonesians perceive China's activities
04:35in the South China Sea as a threat to their country's sovereignty.
04:53In the last two years, one Chinese-built megastructure has made a large impact on the economy here.
05:02This is WUSH, Indonesia's first high-speed rail connecting the capital Jakarta with Bandung.
05:11WUSH has been a game-changer for many businesses in Bandung and Jakarta.
05:17Bandung, the capital of West Java, sits in the hills and has cooler year-round temperatures
05:23than most other Indonesian cities.
05:26The Dutch developed it as a resort center in the early 1900s, and it soon earned the nickname
05:32the Paris of Java.
05:35Bandung remains a popular holiday destination, but it used to take a two-and-a-half-hour drive
05:41to get from Jakarta to here.
05:45Now, with WUSH, it covers the 142-kilometer distance between Jakarta and West Bandung in
05:52some 30 minutes, and it's quite an experience for most Indonesian commuters.
05:57The high-speed train is clean, punctual, and comfortable, as it zips by the Indonesian landscape
06:04at more than 350 kilometers per hour.
06:08There are more check-ins at the Mason Pine Hotel since the arrival of high-speed rail travel.
06:27The conference business is booming too.
06:31Many Jakarta-based corporations are hosting off-site events in Bandung nowadays, because
06:35a day trip to Bandung could take even less time than a commute within Jakarta.
06:43Dari sisi MICE, business kami, meeting, incentive, conference, and exhibition,
06:48sangat-sangat berdampak besar bagi Mason Pine Hotel, kenaikannya itu lebih dari 20% sehingga
06:54tamu-tamu kami itu datang lagi, datang lagi, datang lagi ke hotel kami.
07:00There was a lot of, you know, sort of discussion and polemic around the high-speed train, but I
07:08think after it, it was a lot of, you know, sort of discussion and polemic around the high-speed train.
07:14But I think after it was finished, people started using it. I think that the uptake was very, very fast and very incredible.
07:28And I think it made Indonesians also very proud that we actually have this high-speed train and we are the
07:34the uptake was very, very fast and very incredible. And I think it made Indonesians
07:40also very proud that we actually have this high-speed train and we are the first country
07:45in Southeast Asia. Maybe Australia doesn't even have a high-speed train. It is a very
07:50technologically advanced high-speed train. So in that sense, you know, we are proud that this
07:56could be done in Indonesia. And it wasn't just Chinese engineers, there were also Indonesian
08:01engineers, and there was a partnership there. There was a lot of capacity building and training.
08:09The project marked a pinnacle in Indonesia-China relations under previous President Joko Widodo.
08:31President Prabowo made a campaign promise to continue the economic direction that Joko Widodo had set.
08:52And China was the first foreign country he visited after he won the elections, before his inauguration.
08:58inauguration for us we want to learn a lot from the experience of the People's
09:06Republic of China after he officially took power China was again the first
09:12country he visited during his visit it was reported that President Prabowo
09:19secured more than 10 billion US dollars in investments from China in sectors
09:24spanning food security renewable energy and mining industrialization among
09:30others joining BRICS was also an immediate priority for the Prabowo cabinet
09:40Indonesia became an official member of BRICS on January 7th 2025 making it the
09:46first Southeast Asian country to be part of the organization the BRICS group has
09:51become a major political force in the last two decades building on its desire
09:56to create a counterweight to Western influence
10:01BRICS is truly based on economic cooperation trade and energy security and
10:09many other technological sharing for example and with Indonesia joining our
10:16BRICS being the largest Muslim country in the world has its significance we've
10:24seen Indonesia join BRICS earlier this year and some view that as an indication
10:29that Indonesia is tilting towards China what's your view so one yes BRICS plus but
10:37wanting to join the OECD wanting to join the Gulf Council part of the G20 so you know I see the broader
10:45picture is to expand Indonesia's influence not particularly towards China foreign policy
10:51position is very clear you know we don't want to lean toward to part of this axis yeah we will base our
10:59national foreign policy as well based on the national interest of Indonesia of course we join BRICS but if
11:07BRICS us you know if we do the de-dollarization and this is something that we will reject I think it's not possible
11:15yeah and there's no benefit for us as well Indonesia's economy has been on an upward trajectory in the last decade
11:24it's GDP grew from 890 billion in 2014 to 1.3 trillion in 2024 it is the largest economy in ASEAN
11:37there are many drivers of growth in Indonesia strong infrastructure spending vibrant local
11:46entrepreneurship boosted by technology adoption and major inbound investment in segments like mining
11:54it is in mining that China has played a major role
11:58in Sulawesi stretches of rainforest have been cleared for mining operations what they're after
12:12is nickel a key component for making the batteries used in electric vehicles Indonesia has the world's
12:20largest known reserves of this valuable mineral in 2020 Indonesia banned the export of nickel ore
12:28investors mainly from China built smelters in the country adding value to its metal exports
12:35and creating jobs 10 years ago I think from all this nickel product yeah including the stainless steel I
12:43think it's only like 2 billion US dollar now I think last year we are about 33 34 billion US dollar yeah
12:50and with all this ongoing project that we have today I'm quite confidence maybe it is going to be
12:56about 40 to 45 billion in the next three to four years yeah nickel refining has created many jobs in
13:05Indonesia but Indonesia aims to export much more than just refined nickel it wants to supply batteries and
13:14eventually EVs it's part of an economic development policy known as downstreaming a critical pillar of
13:23President Prabowo's plans for the country the terminology of downstreaming is we would like to create more
13:29value added so how you create that is actually you build an ecosystem of industry that actually connected
13:37each minerals that we have in Indonesia so when you are talking about this downstreaming we are not only
13:44talking about okay nickel downstream you are not only talk about the aluminum we are not only talk about the
13:51copper but how actually you can create the ecosystem for all this critical mineral so that your product can
13:59compete better in the international market I think to create a lithium battery you cannot only rely on
14:06nickel you need lithium you need cobalt yeah you need copper you need aluminum and Indonesia have
14:15almost all of it except the lithium so that's why I think the idea to create this ecosystem is very visible
14:21just as China has been the main partner in building Indonesia's nickel sector it is again the frontrunner in
14:32Indonesia's downstreaming dreams China's btr new material group and Singapore's stellar investment jointly
14:41invested 478 million to build a plant in Indonesia producing battery materials the plant opened in august 2024 a
14:51another 299 million has since been committed in a second phase of investments China's battery giant
15:00CATL has partnered an Indonesian firm to invest up to 1.2 billion in a battery cell manufacturing plant
15:11PT Vale and Chinese battery metal producer jemco are building a 1.42 billion dollar plant to process nickel ore
15:19and further downstream Chinese electric car manufacturer GAC Aon is set to open its factory in Indonesia in 2025
15:30targeting an initial capacity of 100 000 units per year
15:37China EV giant BYD also announced plans to invest 1.3 billion to build an EV plant in Indonesia
15:46the factory is expected to commence operations at the end of 2025 the biggest investment announcement
15:54came from Chinese battery material maker CNGR advanced material company who said it is planning to build an
16:02integrated production facility in Indonesia worth 10 billion dollars
16:07Indonesia's leaders have consistently spoken about strategic balancing in its foreign policy but when
16:18we look at the downstreaming efforts a lot of it seems to be dominated by Chinese companies why is that
16:25if you see the whole value chain of this uh lithium battery and electric vehicle yeah i would say china have the most
16:33advanced and efficient technology yeah if you see top 10 lithium battery companies you see many
16:40Chinese companies you see uh three uh South Korean companies yeah you see maybe one or two Japanese
16:49companies but you will not find any U.S. or European company inside Malaysia it is what it is
16:55today one thing that we can make sure is you know we have a commitment for international cooperation
17:02I think it's very important the commitment from Indonesia is that we want our product to be freely sold to
17:10any countries so it's not only to China it's not only to Japan South Korea US Europe as long as this is
17:18beneficial for both countries we are very open yes at the beginning a lot of the Chinese company but now i
17:24i think you see that a U.S. company is investing Ford is investing in Indonesia South Korean company is
17:30investing Indonesia still even that they still have a joint venture with the Chinese yeah China's strategy
17:39Pearl is that it would like to make other countries dependent upon them economically
17:45at the same time China would like to establish military dominance over them in this combination of economic
17:51dependence and military dominance they believe should compel other countries to become more
17:56accommodating uh or or less confrontational towards China and its long-term goals and interests
18:02and we all know that that one of China's long-term goals is to consolidate control over its claimed
18:07territories uh along its periphery and this is going to you know run up against many countries along
18:15China's periphery in pretty much every direction and Indonesia would of course be one of those why should
18:22China have any military ambitions against Indonesia we have been here for hundreds if not thousands of
18:31years and between China and Indonesia there have never been territorial adventures against each other so
18:39I think uh to have anyone in Washington coming up with such claims of Chinese territorial
18:47ambitions or military ambitions against an important country like Indonesia is really barking at the wrong tree
18:58in October 2024 Indonesia's maritime security agency Bakamla posted a video showing how it handled an
19:07encounter with Chinese coast guard vessels in the contested North Natuna Sea Indonesia's state-owned oil company
19:15Pertamina said in a statement that the Chinese vessel was disturbing the activity of a survey being conducted
19:23China's nine-dash line claiming most of the South China Sea overlaps with Indonesia's exclusive economic zone
19:31near the oil and gas rich Natuna Islands
19:37Indonesia has been bulking up its defense
19:43in January 2025 when Japanese Prime Minister Shigeru Ishiba visited Jakarta it was announced that Japan
19:51will give Indonesia two high-speed patrol boats and boost regional maritime security cooperation with
19:58Indonesia
20:04in June 2023 the Indonesian military was the only unit from ASEAN participating in a two-week long
20:12multilateral war games exercise in Australia
20:17experts have pointed out that these war games called exercise talisman saber are designed with the
20:23purpose of preparing to battle China 2023 was the largest ever iteration of those exercises
20:35but in a careful act of balancing it was also announced in 2025 that Indonesia and China
20:42are planning for joint military exercises
20:46foreign
20:48foreign
20:50public health
20:51foreign
20:52foreign
20:52foreign
20:54international
20:56foreign
20:56foreign
20:57foreign
20:58In such a big background, as a big part of the development of the U.N.E.
21:06The collaboration of the U.N.E.
21:08and the collaboration of the U.N.E.
21:12will be built for the U.N.E.
21:14and the U.N.E.
21:17The U.N.E.
21:19and the U.N.E.
21:21and the support of the U.N.E.
21:24We also welcome the establishment of a new consultation mechanism
21:28between our foreign ministers and ministries
21:32on disarmament, arms control and non-proliferation,
21:36which is an important step towards shared security goals.
21:44How do Indonesians perceive China?
21:46Is it a trusted economic partner or a military adversary?
21:51I think we always see both sides, right?
21:55I think we do see China as an important market,
22:00also an important source of goods, components, investments,
22:05and tourists.
22:06So there's the positive side of China.
22:09But there is also on the downside,
22:12whether it's kind of the perceived potential of military threat.
22:17There's also other issues related to labor and Chinese workers.
22:23There are some other issues that are more on the negative side.
22:28So I think what needs to happen is,
22:32you know, if you reflect back to the 70s,
22:36we had kind of similar issues
22:38when there was a lot of Japanese investment coming in.
22:41You know, both sides need to learn how to accept each other's differences.
22:47And specifically on the Natunas, I think there's always been the discussion that
22:54let's try to look at it pragmatically.
22:56Can we look at whether we can develop this jointly economically, right?
23:02That's more a pragmatic view.
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