Recently, Luhut Pandjaitan, Chairman of the Indonesian National Economic Council, said in an interview with The South China Morning Post that the relationship between Jakarta and Beijing is “very good”. President Préboom is scheduled to meet with about 20 Chinese companies that have invested in the country.
In May of this year, the Chinese Chamber of Commerce sent a letter to Prabowo, expressing concerns about the increasing taxes and strengthened law enforcement in Jakarta. However, several Indonesian ministers insisted that Indonesia must prioritize maintaining its sovereignty over natural resources.
According to an article in the Financial Times published in June, China has warned of the potential negative effects of Indonesia's tightening regulations on the nickel industry. These measures have caused the production cost of nickel to increase by nearly 200%, posing a threat to the operational feasibility of 'almost all similar projects'. Additionally, they could have a negative impact on investments worth about $50 billion, as well as on approximately 400,000 jobs related to the nickel industry.
Luhut said that in order to avoid misunderstandings, the relationship between Prbawo and Chinese senior officials must become 'more close'.
He said, “I told the president that, whether you like it or not, the biggest investor in this country is still China.” He also pointed out that Beijing is “very willing” to share its technology and scientific capabilities.
A representative of a Chinese-funded enterprise operating in Indonesia stated that, considering the scale of investment from China, the company believed it had been subjected to unfair treatment. "With numerous uncertainties, many investment plans may be forced to be suspended in the short term."
Some Indonesian scholars believe that China tends to be cautious in its public comments and responses to maintain relations with its partner countries. Thus, issuing such a harsh warning letter shows that Indonesia has gone too far.
