Indonesia’s thriving export industry has always attracted foreign investors, particularly China. Driven by increasing demand and strategic partnerships, China’s investment in Indonesia’s main export commodities has significantly impacted the region’s economic development.

Indonesia’s Strong Export Relationship with China

The Indonesian government has set a new goal of selling more goods to China by increasing its export target to USD 65 billion and USD 70 billion by 2024. To make this happen, the Ministry of Trade has planned various programs, such as organizing exhibitions of Indonesian products in different parts of China, to boost export performance.

Indonesia’s 5 Top Export Destinations

China's Investment through Indonesia's Top Export CommoditiesChina's Investment through Indonesia's Top Export Commodities

As of 2023, the latest data reveals five key markets capturing the bulk of Indonesian exports, highlighting strategic partnerships and burgeoning opportunities across the globe.

  • China: $56.2 billion (28.66% of total exports)
  • Singapore: $15.5 billion (7.88% of total exports)
  • Japan: $14.6 billion (7.46% of total exports)
  • United States: $11.3 billion (5.76% of total exports)
  • India: $4.2 billion (2.10% of total exports)

China has been Indonesia’s top export destination for several years, accounting for nearly 30% of total exports in 2023.

Top 5 Commodities Exported to China

Indonesia’s trade with China has grown more robust, and China has remained the country’s top trading partner. In 2023, Indonesia imported goods worth USD 62.18 billion and exported goods worth USD 64.94 billion to China. The top five categories of goods Indonesia exported to China are the most in demand.

Categories Descriptions
Ferronickel Firstly, ferronickel (HS 72026000) is the primary commodity most exported from the homeland to China, contributing 23.02% to the overall exports, equivalent to USD 14.95 billion.
Lignite Lignite is another commodity that Indonesia exports to China most, making up 12.03% of the total exports.
Coal Coal (HS 27011900) accounted for 5.92% of the total exports.
Liquid Traction of Palm Oil The liquid fraction of palm oil (HS 15119037) is the following, contributing 4.7% to the total exports.
Nickel Oxide Sinters Nickel oxide sinters (HS 75012000) contributed 4.1% to the exports.

Other potential export commodities to China in 2024

Parulian Silalahi, the Deputy Chief of Mission at the Indonesian Embassy in Beijing, talked about the different types of products Indonesia could sell to China in 2024. The products include Swift’s Nest, coconut, durian, and coffee.

Categories Descriptions
Swift’s Nest Importers in China recognize the superior quality of Swift’s Indonesian  Nest products compared to those from other countries. 
China has consistently been the primary destination for Indonesian Swift’s nest exports, with the total value reaching IDR 5.8 trillion (USD 376 million) last year.
Durian Data from the Export Potential Map indicates a substantial potential for durian exports to China, reaching IDR 2.6 billion (USD 168.5 thousand) per month in 2022.
Coffee Indonesian coffee holds significant market potential in China, aligning with the growing trend of coffee consumption in East Asia since 2018.
Coconut Indonesia has a promising opportunity to outperform Thailand and Vietnam in the coconut product sector. The country’s extensive land area, favorable land contours, and strategic geographical location position it advantageously for coconut production.
Porang East Java, the leading porang producer in Indonesia, offers a unique food source that is low in carbohydrates and calories while being protein-free. 
In January 2023, East Java Governor Khofifah Indar Parawansa proposed exporting porang to China during a meeting with Consul General Xu Yong from the People’s Republic of China.
Bird’s Nests Parawansa also discussed the export of bird’s nests, noting that 30 percent of the national production comes from East Java. 
With such significant production, she expressed confidence that East Java’s bird’s nests could fulfill the dietary preferences of toddlers in China, given the commodity’s popularity among them.

Risks and Challenges

Indonesia faces three potential scenarios regarding its relationship with China under the next president.

Continued Strategic Partnership

The new president will likely prioritize the economic benefits of the China-Indonesia relationship and strengthen ties across various sectors, including the economy, security, and global governance. Despite potential risks, economic considerations and China’s role in the domestic economic agenda make this scenario the most probable.

Cautious Recalibration

A recalibration of the Sino-Indonesian relationship is possible, involving a review of existing economic projects, cautiousness in new agreements, and increased collaboration with alternative partners. Growing risks in some Chinese projects in Indonesia make this scenario somewhat likely.

Rethinking the Relationship

A significant rethink would occur in response to unforeseen shocks or crises in Sino-Indonesian ties, potentially triggered by China’s actions in the South China Sea or economic coercion against Indonesia. 

Under this scenario, Indonesia would aim to mitigate economic risks with China while accelerating military modernization and diversifying external relations with the U.S. and its allies. Though less probable, cautionary tales from Beijing’s actions with Australia and India highlight potential shifts.

Start Exporting to China with InCorp

Indonesia and China have a longstanding and thriving trade partnership. China has consistently been among Indonesian businesses’ top import and export destinations. Recognizing the enduring strength of this economic bond, Indonesia is gearing up to strengthen its ties with China further in the coming years. 

If you are looking for a reliable partner to help you with your exports to China, InCorp Indonesia is the right choice. We simplify and streamline the export process, empowering businesses of all sizes to tap into the vast potential of the Chinese market. 

From seamless export logistics to expert product registration guidance, InCorp equips you with the tools and expertise necessary to:

  • Navigate complex regulations and compliance requirements.
  • Secure swift and efficient product entry into China.
  • Maximize market reach and optimize export success.

Unlock the full potential of the Indonesia-China trade market by filling out the form below.

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