Based on Coordinating Minister for Maritime Affairs (CMMA) statement, the agreement is part of China’s Belt and Road Initiative (BRI), an ambitious road, rail and construction project spanning dozens of countries across Asia, Africa and Europe.
The contract was signed by companies from both countries and consists of :
- Two projects with total investments $17.8 billion to build a hydropower plant on the Kayan river, North Kalimantan
- A $700 million contract to develop facilities to convert coal to dimethyl-ether into gas
- Joint venture_ power development in Bali, worth $1.6 billion.
- The development of steel smelter worth of $1.2 billion.
The countries also signed the agreement on the development of the car and electric motor in Tanah Kuning Mangkupadi Industrial Park, North Borneo. Coordinating Minister Luhut Binsar Panjaitan said, there is a potential investment up to $64 Billion in Indonesia for BRI.
Furthermore, he encourage cooperation between two countries in four economic corridors in Indonesia with a total investment of $51.93 billion namely the development of infrastructure corridors, Kuala Namu Aero-city and industrial areas in North Sumatra. The second is the construction of hydroelectric power plants and industrial areas in KIPI Tanah Kuning in North Borneo.
The third corridor is the construction of International Airport Lembeh, Likupang tourist area, and the industrial area of Bitung in North Sulawesi. Fourth is a development techno park and toll road in Bali.
The magnitude of investment opportunities in Indonesia is shared by Derek Lai, Vice Chairman Deloitte China Global Leader of Belt and Road Initiative: “In Southeast Asia, Indonesia is a country that is very promising.”
Panjaitan as a Special Envoy for the President Joko Widodo to establish a strategic partnership with China
, stressed it that the importance of continued encouraging business relations between the two countries for the sake of national interests.
He gave an examples in Morowali now the economic growth of 60 percent and now Government want to create again in North Halmahera, the production of lithium batteries.
On the same day, Panjaitan hold a bilateral meeting with Gao Yan, Deputy Minister of Commerce of China. In his speech, Minister Gao convey its response to the four corridors of potential cooperation and work organization the Indonesian government.
In addition, the Coordinating Minister also open the door wider Chinese imports of goods from Indonesia. Gao Yan said she would have further discussions with relevant institutions on the latter’s offer for an agreement between leaders of both countries.
The long-term target of government in responding BRI launched by Chinese President Xi Jinping in September and October 2018. As background, focus on the idea of BRI, among others, investment in infrastructure, construction, construction of railroads, highways, automotive products, real estate, power generation, iron and steel.
Some estimates that BRI as mega infrastructure projects and investment in this century involving 68 countries. When converted, this means that there is 65 percent of the population is involved directly or indirectly in the Chinese government’s mega projects.