China’s pledge to ramp up its investment in Indonesia’s electric vehicle (EV) industry has become one of the key outcomes of a recent bilateral meeting between both countries’ top diplomats.

Foreign Affairs Minister Retno Marsudi headed to Beijing on Friday for the fifth round of the so-called joint commission for bilateral cooperation talks with her Chinese counterpart Wang Yi. China has been among Indonesia’s top foreign investors over the years. As the mineral-rich Indonesia tries to chase its EV dream, it is no surprise that Jakarta will try to convince Beijing to invest more in its e-mobility sector at every chance it gets. Friday’s bilateral meeting was no exception.

“China is one of Indonesia’s important partners, including from an economic perspective. Both sides will try to build mutual trust and strengthen our mutually beneficial ties that are based on respect towards multilateralism and international law,” Retno said in a press statement following the meeting.

“We have agreed to boost Chinese EV investment in Indonesia to support the development of the EV ecosystem,” Retno said.

The EV ecosystem development is part of Indonesia’s plan to capture more value out of its commodities by having its natural resources processed into half-finished and finished goods at home. While China has invested in Indonesia’s domestic processing industry, Jakarta wants the partnership to embrace environmental, social, and governance (ESG) principles.

“I underlined the importance of having a quality partnership that pays attention to ESG principles and international standards, including the UN’s Guiding Principles on Business and Human Rights,” Retno said.

Just earlier this month, President Joko “Jokowi” Widodo launched a manufacturing plant belonging to Chinese battery material giant BTR in Kendal, Central Java. The facility can produce 80,000 tons of anode materials for lithium-ion batteries every year -- enough to support the manufacturing of 1.5 million EVs. BTR is planning to double the annual production capacity.

Government data showed China had invested USD 3.9 billion throughout the S1 2024. China was Indonesia’s second-largest source of foreign direct investment (FDI) over the said period with Singapore topping the list as it invested about USD 8.9 billion.

Indonesia also attracted IDR 181.4 trillion (USD 11.6 billion) in investments for the domestic processing industry throughout January-June 2024. About IDR 6 trillion went to the EV battery ecosystem, while IDR 80.9 trillion was related to nickel smelting investment, the government reported.