China and Indonesia have agreed to strengthen military cooperation while expanding collaboration in minerals, energy and technology, as Jakarta continues balancing its relationships with Beijing and Washington amid rising geopolitical and economic tensions.
Chinese Foreign Minister Wang Yi made the remarks on Friday during his visit to Jakarta, where he was accompanied by Defence Minister Dong Jun for talks with their Indonesian counterparts.
Wang said both countries should seize the current opportunity to deepen bilateral cooperation, warning that unilateralism and hegemonic actions were creating serious challenges for global cooperation and stability.
“China actively aims to build China-Indonesia cooperation at a high level,” he said.
The two countries agreed to work together across a wide range of sectors, including artificial intelligence, defence, rail transport, green energy, satellites and fisheries.
Indonesian President Prabowo Subianto has maintained his country’s “free and active” foreign policy, seeking friendly relations with all countries, including China and the United States. Washington remains an important trading partner, while defence cooperation between Indonesia and the US has also expanded.
Wang said the two sides had agreed to support each other’s core interests while increasing cooperation in energy and mineral resources.
Indonesia, a resource-rich G20 economy valued at around US$1.4 trillion, has significant reserves of nickel, tin, copper, gold and bauxite. It is also the world’s largest exporter of palm oil and thermal coal, with China among its biggest buyers.
China has become a dominant investor in Indonesia’s nickel-processing industry. However, recent Indonesian policy changes involving exports and tighter mining quotas have prompted some Chinese companies to explore alternative sources.
Chinese Defence Minister Dong Jun was welcomed by a military guard of honour before meeting his Indonesian counterpart, Sjafrie Sjamsoeddin.
Dong said there was significant potential for closer cooperation between the two militaries, adding that bilateral defence ties were becoming more effective and advanced.
Sjafrie said military cooperation would be expanded through activities including joint exercises and exchanges between military officers.
Following talks between the defence and foreign ministers, Sjafrie revealed that both sides had also discussed establishing a joint munitions factory in Indonesia.
The proposed facility could manufacture ammunition, missiles and rockets, with possible technology transfers from China. It is expected to begin operations by 2027.
“This is a progressive step in building Indonesia’s defence capabilities for the present and the future,” Sjafrie said.
The discussions came shortly after a rare joint naval exercise between China and Indonesia east of Taiwan sparked criticism from Taipei. Indonesia’s navy said the exercise was part of routine military activities and noted that it also conducts exercises with Japan and the United States.
Defence analyst Curie Maharani said Indonesia viewed the exercise as routine, but its location allowed China to send a different political message.
She said Indonesia had gained an important lesson about how major powers could use defence diplomacy as a tool to project influence.
Indonesia also has differences with China over activities in the South China Sea, most of which Beijing claims. Jakarta has nevertheless maintained a measured position and does not regard itself as a party to wider territorial disputes involving China, the Philippines, Malaysia and Vietnam.
China remains one of Indonesia’s major sources of foreign investment, contributing US$3.9 billion in foreign direct investment during the first half of 2026, according to Indonesian figures.
However, some Chinese businesses have raised concerns over regulations affecting their operations.
In May, Chinese companies operating in Indonesia urged the government to adopt more business-friendly policies, citing higher taxes and changes to the nickel pricing system.
The China Chamber of Commerce in Indonesia also complained about what it described as excessive regulation and enforcement, while alleging corruption and extortion by some authorities.
Major Chinese investors in Indonesia include Contemporary Amperex Technology, the world’s largest electric vehicle battery maker, and steel producer Tsingshan Group, which operates smelters in the country.
