Indonesia, China to agree on trade pact negotiation process at APEC summit
- Trade Negotiations: Indonesia and China plan to agree on the process for negotiating a comprehensive economic partnership at the Asia-Pacific Economic Cooperation summit.
- Bilateral Trade: Bilateral trade totaled $154.58 billion in 2025, with Indonesia recording a $20.5 billion deficit.
- Domestic Benefits: Analysts say the proposed agreement should support higher-value exports, local suppliers and technology transfer while limiting dependence on foreign inputs.
JAKARTA, Indonesianpost.com — Indonesia and China plan to agree on the process for negotiating a Comprehensive Economic Partnership Agreement (CEPA) at the Asia-Pacific Economic Cooperation (APEC) summit.
“We will meet with China at the APEC summit and agree on the process. But work is already underway,” Susiwijono Moegiarso, secretary of Indonesia’s Coordinating Ministry for Economic Affairs, told reporters at his office in Jakarta.
The move follows a meeting between officials from both countries in Beijing on September 26, 2026, when they agreed to accelerate preparations for negotiations on the Indonesia-China Comprehensive Economic Partnership Agreement (IDC-CEPA). The ministry said China welcomed the proposal and that the two sides would identify the areas of cooperation to be covered by the agreement.
Susiwijono said the proposed pact would build on trade ties established under the ASEAN-China Free Trade Area (ACFTA), which links China with the Association of Southeast Asian Nations (ASEAN). The two countries do not yet have a bilateral trade agreement, despite China being Indonesia’s largest export destination for goods other than oil and gas.
Data from Statistics Indonesia showed that bilateral trade reached $154.58 billion in 2025. Indonesia exported $67.04 billion worth of goods to China and imported $87.54 billion, leaving a trade deficit of $20.5 billion.
Teuku Riefky, a macroeconomics and financial markets researcher at the Institute for Economic and Social Research at the University of Indonesia’s Faculty of Economics and Business, said the proposed CEPA would have a broader scope than ACFTA, potentially benefiting both countries across trade and investment.
“The CEPA is more comprehensive, so its benefits should be broader because the agreement itself covers more areas,” Riefky told Xinhua on November 10, 2026.
Ronny P. Sasmita, a senior analyst at the Indonesia Strategic and Economics Action Institution, said Indonesia should use the proposed agreement to improve the quality and diversity of its exports rather than simply increase trade volumes.
Indonesia should seek lower or zero tariffs on products with strong export potential, he said, while also working to streamline non-tariff requirements involving food safety standards, certification and quarantine. Such measures could expand access to the Chinese market for shrimp, coffee, cocoa, spices and tropical fruit.
In manufacturing and downstream processing, Ronny called for greater exports of high-value-added products, including automotive components, batteries, electronics and processed mineral products.
“That way, the benefits of trade would not be confined to extractive industries but would also create jobs and strengthen the country’s industrial base,” Ronny told Xinhua in a separate interview.
He also said the proposed agreement should create opportunities for micro, small and medium-sized enterprises to participate in Chinese supply chains and sell through Chinese commerce platforms.
For China, Ronny said, Indonesia is a strategic partner because of its large domestic market, abundant natural resources and important geographic position in Southeast Asia. The agreement could open investment opportunities for Chinese companies in manufacturing, electric vehicles, batteries, petrochemicals and the digital economy, while positioning Indonesia as a production base serving ASEAN markets.
Closer supply-chain integration could benefit both countries by combining China’s manufacturing technology and global production networks with Indonesia’s natural resources, domestic market and processing industries, he said.
Ronny cautioned that greater openness to trade and investment should not deepen dependence on foreign products, technology and capital. Nevertheless, he said Indonesia’s trade deficit with China was not necessarily harmful, as some imports consisted of raw materials, intermediate goods and capital equipment that supported domestic production.
He added that incoming investment should involve local suppliers, workforce training, technology transfer and compliance with environmental and labor standards to ensure that more of the value created remained in Indonesia. [IP/Bilah]
