2.1.1 How does Beijing compare with other development partners?

To contextualize its role relative to others, we benchmarked the PRC against six active development partners in Indonesia. This included the Asian Development Bank (ADB), the World Bank (WB), Australia, Japan, South Korea, and the United States (U.S.). Each of the six comparators reports its development finance by country, sector, flow type, and year to the Organization for Economic Cooperation and Development (OECD) Creditor Reporting System (CRS). Our analysis considers Official Development Assistance (i.e., grants and no- or low-interest loans, commonly referred to as “aid”) and Other Financial Flows (i.e., loans and export credits at market rates referred to as “debt”). We focus this discussion on commitments for comparability.

Between 2000 and 2023, Indonesia received an estimated US$69.6 billion in official development finance from the PRC, its largest bilateral financier (see Table 2.1). Beijing outspent the combined contributions of the four bilaterals:^[12] Japan (US$29.3 billion), South Korea (US$15.7 billion), Australia (US$10.3 billion), and the United States (US$7.97 billion). The PRC’s development finance also eclipsed the two multilaterals: the WB (US$47.7 billion) and the ADB (US$36.6 billion).

2.1.2 How do flows of Chinese development finance vary across ASEAN?

Among its ASEAN neighbors, Indonesia stands out as the top recipient of Beijing’s development finance dollars between 2000 and 2021. Beijing’s global interest in using development finance to open up new markets for Chinese firms likely informs its interest in Indonesia, Southeast Asia’s largest economy and an important hub for regional connectivity. The sectoral composition of Chinese development finance in the country’s transport, energy, and extractives sectors aligns with the PRC’s interests in securing energy and mineral resources. These areas also mirror Indonesia’s domestic development priorities.

Indonesia is the PRC’s flagship partner in advancing Beijing’s regional infrastructure ambitions under the BRI. The Jakarta–Bandung High-Speed Rail is ASEAN’s largest BRI project. Indonesia also hosts other PRC-backed projects in digital networks, ports, and extractives, as part of Beijing’s Digital Silk Road push to expand data infrastructure and e-commerce platforms across ASEAN (Rakhmat, 2022). These efforts are backed by financial instruments such as concessional and commercial loans from China Development Bank and China Eximbank.

More broadly, variation in the PRC’s development finance portfolio across the ASEAN region is likely shaped by a combination of factors. On the demand side, a country’s national development priorities and regulatory frameworks may make working with Beijing more or less attractive across ASEAN members. On the supply side, Beijing also considers the degree to which a prospective recipient is geostrategically important and diplomatically aligned with the PRC in its development finance allocations.

In mainland Southeast Asia, Laos (US$23.8 billion, 306 projects) and Cambodia (US$19.8 billion, 369 projects) are other prominent recipients of PRC development finance over two decades. Despite their smaller economies, both countries have maintained close political ties with Beijing and have been enthusiastic participants in the BRI framework. Their infrastructure portfolios include large-scale transport corridors, power generation, and hydropower assets, often financed through loans from Chinese state policy banks. These flows, while substantial, typically involve limited policy conditionality, distinguishing them from multilateral development financing alternatives.

Vietnam (US$32.4 billion, 178 projects) and Malaysia (US$17.9 billion, 162 projects) have taken a more selective and cautious approach to PRC development finance. Both countries have leveraged Chinese capital to finance strategic projects but have prioritized regulatory due diligence, often renegotiating terms to ensure alignment with domestic political and fiscal priorities. Vietnam was the second-largest recipient of Chinese projects in value. However, it lags behind its Mekong region peers in project implementation, due partly to Hanoi’s skepticism of closer ties to Beijing (Ha, 2022). Vietnam’s historical tensions with the PRC and ongoing maritime disputes in the South China Sea have contributed to a more cautious investment posture, particularly in politically sensitive sectors. Malaysia has similarly restructured major BRI projects, such as the East Coast Rail Link.

Comparatively, the Philippines and Thailand have received lower volumes of Chinese development finance: US$9.1 billion across 219 projects and US$5.8 billion over 99 projects, respectively. In the case of the Philippines, shifts in political leadership and foreign policy alignment have had a measurable effect on investment flows (Custer et al., 2024). Under President Rodrigo Duterte, closer diplomatic ties with Beijing led to an uptick in project approvals, though many remained slow to disburse (ibid). Thailand, a relatively mature middle-income economy with diversified investment sources, has maintained a more conservative portfolio of PRC-financed projects, supplementing rather than depending on Chinese capital.

2.2.1 Abdurrahman Wahid (1999-2001)

Only a decade following the reestablishment of bilateral relations, Indonesian President Abdurrahman Wahid emphasized stability and reconciliation in his dealings with China. His administration laid the groundwork for normalizing Sino-Indonesian relations, removing restrictions for the Chinese-Indonesian community to observe religious, cultural, and linguistic traditions such as the Lunar New Year. He formally recognized Confucianism as an official religion and appointed Chinese-Indonesian economist Kwik Kian Gie as Coordinating Minister for the Economy, a meaningful gesture of inclusion. Direct economic engagement with Beijing was minimal, but Wahid’s policies created the conditions for more robust bilateral cooperation in the following years.

Despite serving only 21 months in office, President Wahid spent nearly a quarter of his tenure on state visits.^[25] China was Wahid’s first visit in 1999, a signal of his desire to improve bilateral relations, which culminated in a Joint Communiqué.^[26] The 1997 Asian Financial Crisis presented China with an opportunity to translate renewed diplomatic ties into tangible support, primarily channeled through multilateral rather than bilateral frameworks. As a goodwill gesture, Beijing contributed US$400 million in standby loans as part of the IMF’s rescue package for Indonesia, US$200 million in export credit facilities, a US$3 million grant in medicines, and 50,000 tons of rice.^[27] This positioned China favorably in the eyes of Indonesia (Sukma, 2009). Otherwise, Beijing’s development finance during this period was limited, likely influenced by political sensitivities after the 1998 riots that disproportionately affected Chinese-Indonesians.

2.2.2 Megawati Soekarnoputri (2001-2004)

Assuming office following Wahid’s 2001 impeachment, President Megawati Soekarnoputri continued gradual normalization in Indonesia-China relations. Her administration formally recognized the Chinese New Year as a national holiday. Trade and investment between the two countries grew steadily, reaching US$8.7 billion in 2004,^[28] comparable to Indonesia’s trade volume with the U.S. that year (Indonesian Statistics Agency, 2025). Beijing also sent humanitarian and disaster relief to Indonesia following the 2002 Bali Bombing, the Nabire earthquake, and an influenza outbreak, along with donated motorcycles for the Indonesian National Police in 2003. However, most of the PRC’s development finance (US$2.18 billion) was in the form of debt to support hard infrastructure projects with the expectation of commercial returns.^[29]

President Megawati’s administration marked a shift in Beijing’s development finance from symbolic gestures to more strategic, sector-specific engagements. Financing was increasingly tied to long-term economic cooperation, particularly in energy and infrastructure. Although modest compared to the scale seen in later years, China’s financial support during this period (nearly US$2.2 billion) demonstrated a growing willingness to invest in Indonesia’s post-crisis recovery and development agenda.

Energy was the cornerstone of growing economic ties, driven partly by China’s increasing consumption needs. China was a net importer of oil products by 1993 and of crude oil by 1996. The China National Offshore Oil Corporation became the largest offshore oil producer in Indonesia, acquiring interests in five national oil and gas assets from the Repsol-YPF Group for US$585 million (Offshore Magazine, 2002).^[30] Indonesian officials sought long-term energy export contracts, including direct talks with Chinese Premier Zhu Rongji (Tempo, 2002).

During President Megawati’s March 2002 state visit to Beijing, Chinese President Jiang Zemin pledged US$6 million in grants and US$400 million in soft loans^[31] to Indonesia, earmarked for railway development in East and West Java (Liputan 6, 2002) and signed a cooperation agreement between Pertamina and PetroChina, the largest oil and gas companies from each country (Weaver, 2002). The visit paved the way for the inaugural Indonesia-China Energy Forum in 2002. A key outcome of the forum was a landmark US$8.5 billion, 25-year contract to export liquefied natural gas (LNG) from Indonesia’s Tangguh block to China’s Fujian Province (People’s Daily, 2002).^[32]

Indonesia’s Minister of Energy and Mineral Resources at the time hailed the LNG agreement as “the biggest project since the New Order era,” underscoring its importance for Indonesia’s post-crisis economic recovery (People’s Daily, 2002). Subsequent administrations criticized and sought to renegotiate the LNG deal, which was considered disadvantageous to Indonesia (Oster, 2006; Detik, 2008; Cahyafitri, 2014; MEMR, 2014). President Megawati defended the agreement, arguing that it opened the door to greater Chinese investment in Indonesia’s infrastructure and domestic processing capacity.

Beijing financed a second signature infrastructure project, the Surabaya–Madura (Suramadu) Bridge, with US$575.5 million via two preferential buyer’s credit loans from China Eximbank. Costing an estimated Rp 4.5 trillion (roughly US$466.6 million at current dollar rates) and spanning 5,400 meters, the Suramadu Bridge was among the most ambitious infrastructure projects of its time and a milestone in Indonesia-China relations. The project aligned closely with Indonesia’s broader national development goals, particularly around inter-island connectivity (The Jakarta Post, 2009).

2.2.3 Susilo Bambang Yudhoyono (2004-2014)

Less than two months after President Susilo Bambang Yudhoyono was sworn into office in 2004, a massive 9.3-magnitude earthquake and tsunami hit Aceh and Nias in Northern Sumatra. Relief operations were complicated, as concerns were raised over the presence of foreigners in Aceh, a conflict zone where the Indonesian military had sought to quell a separatist movement (Fox News, 2005). Nevertheless, President Yudhoyono welcomed international assistance, which he later credited with facilitating a peace agreement that ended the 30-year conflict (Yudhoyono, 2025).

China initially provided US$2.6 million to tsunami-affected countries. Prime Minister Wen Jiabao subsequently pledged US$60 million in relief and reconstruction aid for ASEAN countries.^[33] During his state visit to Jakarta, Chinese President Hu Jintao elevated bilateral relations with Indonesia to a strategic partnership (Qin, 2005), pledging an additional US$3.63 million in aid, along with US$300 million in loans to support infrastructure development and the reconstruction of areas affected by the tsunami disaster (China Daily, 2005).^[34][35] China also supplied disaster relief to support Indonesia’s response to a series of earthquakes in Alor (2004), Nabire (2005), and Yogyakarta (2006).

Cooperation between China and Indonesia extended beyond the initial relief and reconstruction focus to encompass a deepening of economic ties between Presidents Hu and Yudhoyono. Bilateral trade expanded, moving from raw material exports toward investment in Indonesia’s capacity to domestically process its natural resources. The shift was described as a “honeymoon” phase (The Jakarta Post, 2008). Yudhoyono’s tenure saw a noticeable increase in Chinese loans directed to Indonesia’s private sector. Recipients ranged from large-scale mining corporations to consumer goods companies.

While development finance from Beijing lagged behind Seoul and Tokyo, China’s capital was directed toward several of Indonesia’s strategic priorities (The Jakarta Post, 2008), where there was implicit openness to foreign investment. For example, the Yudhoyono government had identified industrial development, transportation infrastructure, and telecommunications as essential facets of its roadmap for national growth over a 20-year time horizon.^[36] Aligned with this, most of Beijing’s development finance during Yudhoyono’s tenure was directed to the energy and industrial sectors. These investments aligned with Indonesia’s urgent infrastructure development priorities, such as the transition from oil- to coal-fired power plants, to help Indonesia’s state-owned utility, Perusahaan Listrik Negara (PLN), overcome supply chain bottlenecks and high financing costs (Sambodo and Oyama, 2010; Ali and Wulandari, 2008).^[37]

Beginning in 2006, President Yudhoyono signed several Memoranda of Understanding (MOUs) on energy projects worth US$3.56 billion during the Indonesia-China Energy Forum in Shanghai (Detik, 2006; Antara, 2006).^[38] The centerpiece of Yudhoyono’s energy policy was his 10.000 MW Fast Track Program (FTP) to rapidly increase domestic electricity supply.^[39] The plan called for the construction of 10 new power plants in Java (7.430 MW) and 25 outside Java (2.121 MW), at an estimated cost of Rp 98.1 trillion.^[40] PLN financed 15 percent of the project, with the remaining 85 percent sourced from foreign loans (MEMR, 2008).

Beijing was a fast mover, committing big money to support several projects in the first phase of the Fast Track Program. A reported 22 projects were awarded to Chinese companies, with nearly 90 percent of the project financing sourced from China (Detik, 2009; Kompas, 2009). President Yudhoyono announced a further US$761 million^[41] in Chinese financing commitments for energy projects led by PLN in 2009, during an inauguration ceremony for the Suramadu Bridge. This included US$468 million^[42] from China Development Bank for the Adipala power plant in Cilacap, Central Java, and US$293 million^[43] from the Export-Import Bank of China for the Pacitan plant in East Java (Alfian, 2009).

Energy, particularly hydropower, would remain a focus of Indonesia-China collaboration in Yudhoyono’s second term, which secured US$3.6 billion in Chinese financing across 10 projects. The largest was a US$883 million buyer’s loan^[44] for the second expansion of the 660 MW Cilacap Power Plant. Three of the nine power plants financed were part of phase two of Yudhoyono’s Fast Track Program, which aimed to rapidly expand the nation’s electricity generation capacity. This included the 110 MW Jatigede Hydropower Dam, backed by a US$147.6 million loan from China Eximbank.^[45] Funding was distributed to projects across Indonesia, with several serving specific industrial needs as captive power sources (e.g., the Sulawesi Mining Power Station Project in the Morowali Industrial Park) or private sector projects under the Independent Power Producer scheme.

Projects related to refining and processing facilities—from establishing smelters and paper factories to expanding palm oil production—gained traction by Yudhoyono’s second term. Most financing was directed toward private sector entities to support business growth. A notable example is in 2013, when China Development Bank (CDB) provided a US$2.3 billion loan to PT OKI Pulp and Paper Mills, a subsidiary of Asia Pulp and Paper, for the construction of one of Indonesia’s largest paper mills (Antara, 2013).^[46] The loan agreement was one of nearly two dozen signed during President Xi’s 2013 state visit to Indonesia,^[47] collectively worth US$28.2 billion.^[48] These cooperative agreements spanned critical minerals processing, transportation, telecommunications, training and capacity building, aviation, banking, and plantation development.

Digital connectivity was another recurring theme of China’s investments during Yudhoyono’s tenure. Buyer’s credit facilities—lending to finance the acquisition of equipment and services from Chinese companies such as ZTE and Huawei—was a popular modality for Beijing’s investments in Indonesian firms such as Axis, PT Smart Telecom, PT Indosat, and Telekom Indonesia. This telecommunications emphasis was also responsive to a presidential priority, as the sector’s development featured prominently in Yudhoyono’s national budget plans and commitment to see all Indonesian villages connected to the internet by 2010. His administration launched key connectivity programs such as Desa Internet (Internet Village), Desa Berdering (Ringing Village), and Palapa Ring. These projects blended domestic private and public finance, with sizable sums bankrolled by China, along with implementation by private and state-owned telecommunications companies.

Following the success of the Suramadu Bridge (see Box 1 above), this period also saw increased investment in more diversified transport and logistical infrastructure projects, including toll roads, railways, and bridges. There was also a significant uptick in business loans, with 36 separate instances amounting to nearly US$1 billion.^[49] Merpati Airlines, established to serve Indonesia’s most remote regions, received one such loan to facilitate the purchase of 15 MA60 aircraft from China’s Xi'an Aircraft Industrial Corporation. However, the company experienced difficulty repaying the loan, eventually filing for bankruptcy in 2014.

China-Indonesia relations were at a relative high point during Yudhoyono’s tenure, with the inauguration of the Suramadu bridge, along with the spate of financing for energy, connectivity, and industrial development. In a landmark moment, during his 2013 state visit, President Xi addressed the Indonesian parliament, where he announced plans to build the “21st Century Maritime Silk Road,” the establishment of the Asian Infrastructure Investment Bank, and the signing of the China-Indonesia Comprehensive Strategic Partnership. In line with its two-track development model of pairing big-ticket infrastructure projects with small-dollar goodwill efforts, Beijing provided in-kind support and financing for Mandarin language courses, Confucius Institutes across six universities in Indonesia, and scholarships for Indonesian students to study abroad in China.

However, Chinese development finance was not without controversy. Signs of strain emerged over disbursement delays, which triggered setbacks in project implementation,^[50] while some cabinet officials raised concerns that China’s dollar-denominated loans could increase foreign exchange costs and create an onerous financial burden for Indonesia to repay.^[51] Beijing-backed energy projects (e.g., Parit Baru Power Plant Project, Celukan Bawang Coal-Fired Power Plant) were scrutinized over labor and environmental concerns. A syndicated loan for Krakatau Steel was beset with delays and cost overruns before it was ultimately deemed economically unviable and closed a mere six months after construction was completed (Pratama, 2022). This led to the arrest of senior executives^[52] and state losses amounting to Rp 6.9 trillion (Tempo, 2022).^[53]

2.2.4 Joko Widodo (2014-2024)

Assuming office in 2014, President Joko Widodo inherited a relationship with China that was on the rise. The previous year, the two countries had signed a Comprehensive Strategic Partnership, and Chinese President Xi Jinping chose Jakarta to launch the Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank. However, this cooperation was tempered by frequent maritime disputes between the two countries over fishing rights near the Natuna Islands (Lalisang and Candra, 2020). Widodo was pragmatic in his approach to Beijing, viewing China as a useful partner in helping Indonesia advance its national development and economic growth. Positioning Indonesia as a central node in global maritime trade and security was the cornerstone of Widodo’s foreign policy agenda, which he coined the “Global Maritime Fulcrum” (GMF).

The Widodo administration made infrastructure development—including an integrated mass public transportation system across sea, air, and land—a featured element of the president’s nine-point agenda known as the NawaCita.^[54] Indonesia and China signed a Memorandum of Understanding (MoU) in 2018, formalizing maritime and logistics infrastructure cooperation. The MoU combined elements of BRI and GMF to enhance Indonesia’s inter-island and regional connectivity, drive economic growth, and meet rising domestic demand while hedging risk.^[55] In several respects, the agreement attempted to mitigate concerns over indebtedness and dependence that had plagued Beijing’s BRI projects elsewhere (Bisnis.com, 2019; Cheang, 2019b).

Chinese development finance reached record levels in the number of projects (233) and dollars (US$40.3 billion) to help resource President Widodo’s ambitious infrastructure agenda. Notably, these investments were heavily concentrated during Widodo’s first term and were more frequently financed using debt-like instruments rather than conventional aid. The early years of Widodo’s presidency saw the return of large-scale Chinese energy investments in Indonesia.

Under his NawaCita agenda, President Widodo sought to install an additional 35,000 MW of electricity generation capacity across 210 locations over five years to meet growing demand.^[56] Most of Beijing’s energy-focused development finance was oriented toward three projects, each exceeding US$1 billion in investment: (1) the 1,000 MW Cilacap Power Plant Phase 3 Expansion; (2) the 1,200 MW Bangko Tengah Mine-Mouth Power Plant; and (3) the 2,100 MW Java-7 Coal-Fired Power Plant. A smaller portion of Chinese financing was directed toward geothermal and gas projects, though these remained on a more limited scale.

The transport and logistics sector also attracted ample attention from Beijing, with the majority of financing directed toward the Jakarta–Bandung High-Speed Rail Project (HSR), the first of its kind in Indonesia and Southeast Asia (see Box 3 below).^[57] The project triggered competing proposals from Japan and the PRC before Indonesia ultimately chose Beijing’s proposal, funded by the China Development Bank through a 75 percent debt and 25 percent equity structure (Brummitt and Chatterjee, 2015). Other PRC-financed transport investments included 16 toll road projects (US$2.45 billion), four railway projects (US$414.1 million), and the leasing of two 737-800 jets by BOC Aviation Limited to PT Lion Mentari Airlines.

Under the Widodo administration, and much like in its dealings with President Yudhyono, Beijing continued to direct a substantial portion of its development finance to projects in the industry, mining, and construction sector (US$6.5 billion). Critical minerals were a priority, aligning with Beijing’s hunger for natural resources and Jakarta’s interest in capturing more added value from these exports. Notable projects included a US$1.26 billion loan for the Xiamen Xiangyu Integrated Stainless Steel Plant Project in South Sulawesi and financing related to projects based in the Morowali Industrial Park, including smelters, steel plants, and captive coal power plants across four phases worth US$ 2.8 billion in total (see Box 3 below). Other projects focused on processing lithium and cobalt, but some also went to basic materials such as cement.

During the COVID-19 pandemic, the PRC’s development finance to Indonesia was primarily focused on supporting the country’s response efforts, from personal protective equipment (PPE) and vaccines to liquid oxygen and other medical supplies worth roughly US$85 million. Beijing also supplied a capital injection to Bank Rakyat Indonesia in October 2020, allowing it to restructure more than 2.9 million debtors, with a total loan value of Rp190 trillion (Sidik, 2020).

With just a few months into Prabowo Subianto’s presidency, we can only make educated guesses as to how the PRC’s development finance might evolve. The Subianto administration has set out an ambitious goal of 8 percent growth for Indonesia and views Beijing as a crucial economic partner (Cabinet Secretariat of Indonesia, 2025). Chinese officials warmly characterized Indonesia as a model partner in the Global South and vital to China’s industrial value chains (Liu and Rayi, 2024). Indonesia was the first in Southeast Asia to join the BRICS+^[58] as of January 2025, a hedge against uncertainty over U.S. tariff policies (King, 2025).

Rather than a full embrace of China, Subianto’s approach appears to build upon the foreign policy of his predecessor, Joko Widodo, who practiced “pragmatic equidistance” (Laksmana, 2017), balancing relationships with competing powers without aligning fully with either side in order to reap economic benefits but with diplomatic autonomy. This is not a new idea. Indonesia was an early leader of the non-aligned movement, promoting collective self-reliance and solidarity of developing countries to pursue shared economic goals (Pedersen, 2021). Beijing has sought to burnish its status as a developing country to ingratiate itself with other emerging economies like Indonesia (Strangio, 2025).

3.1.1 Views of Chinese implementers in Indonesia

Over the last two decades, the PRC has financed and delivered infrastructure projects, both physical and digital, at scale in Indonesia and around the world. These projects hold transformative potential for markets and societies, but they are not without risks for the communities proximate to them. Implementers aiming for speedy delivery may overlook protocols to mitigate negative environmental, social, or governance outcomes. Limited transparency and competition in how firms are selected to implement PRC-financed projects can also create perverse incentives to engage in questionable financial practices. Chapter 4 details some of these risks and outcomes at the portfolio level for PRC-funded development in Indonesia. Here we examine this from the perspective of specific implementers.

How risky is it to work with a given supply-side entity on a development project? To assess the risks associated with the entities involved, we used the World Bank’s (n.d.)^[96] and the Asian Development Bank’s (n.d.)^[97] respective databases on sanctioned, debarred, and suspended firms and individuals. If an entity is currently sanctioned—or has been in the past—it does not prevent them from engaging directly with the government or private companies in Indonesia. The sanctions databases serve merely to evaluate the reputation of these entities with two intergovernmental financial institutions.^[98]

We cross-checked each of the 439 known suppliers of PRC-financed projects in Indonesia (including financiers, co-financiers, and implementers) against the World Bank (n.d.) and Asian Development Bank (n.d.) sanctions databases to identify whether any of these entities were currently or historically debarred or suspended (see Table 3.8 above). Fourteen of the fifteen sanctioned entities operating in Indonesia are Chinese state-owned companies. One is a JV between Hutama Karya (an Indonesian state-owned construction company), the China State Construction Engineering Corporation (CSCEC), and China Harbor Engineering Company (CHEC).

To assess the degree to which there are debates about the performance and contributions of these sanctioned or debarred implementers in the media, we conducted a limited review of articles using the Factiva Dow Jones News and Analytics Database. Strikingly, few media articles profiled either these firms, the PRC-financed development projects they supported in Indonesia, or outcomes for local communities.^[100] This (non)-finding is interesting, because it stands in stark opposition to a similar exercise conducted for the Philippines in 2024, where local media coverage and public discourse about PRC-financed development have been more heated and visible (Custer et al., 2024).

Limited and superficial coverage of PRC-financed projects and implementers in Indonesia could reflect lower visibility into these activities or apathy regarding the relevance of past sanctions on present performance. Alternatively, this could be more of a reflection of differences in the Indonesian media environment compared to the Philippines. Local experts interviewed for this research, for example, indicated that while media freedom has improved in the post-Suharto era, the environment is still fraught for journalists.^[101] Further analysis on China’s use of state-owned media, diplomatic channels, and social media to influence the narratives on its development projects in Indonesia will be available in an upcoming report later in 2025.

One case in point is local coverage of China State Construction Engineering Corp Ltd. (CSCEC), sanctioned by the WB in 2009 for colluding to fix prices when bidding for a road construction project in the Philippines (Reuters, 2009). This reputational black mark on its profile did not appear to have much influence on media articles about CSCEC-implemented projects in Indonesia, which date back to at least 2005.

Media coverage mentioned examples of CSCEC projects, ranging from a partnership with PT Hexa Prima Mekanikal to build energy infrastructure (IDX Channel, 2024) to the construction of a lithium battery anode factory for PT Indonesia BTR New Energy Material (Perwata, August 2024). CSCEC also attracted positive stories profiling its group bicycling activities to promote environmentally-friendly lifestyles (Sebayang, 2022) and extolling the job creation and investment potential of an MoU between the Batang Industropolis Special Economic Zone and CSCEC to develop the Two Countries Twin Park^[102] (Antara, 2025).

3.2.1 Which firms and agencies have the greatest exposure to Beijing?

Indonesian state-owned enterprises and JVs/SPVs in four sectors—transportation, energy and utilities, extractives and mining, and financial services—attract a significant share of PRC development finance. Kereta Cepat Indonesia China (KCIC), the joint venture responsible for the Jakarta–Bandung High Speed Rail, received more funding than the next three highest-paid recipients combined. Other state-owned enterprises, such as Perusahaan Listrik Negara (the national electric company), PT Bank Rakyat Indonesia, and Garuda Indonesia (the national airline), were among the largest recipients.

Indonesian SOEs or specific government agencies may be the legal borrower or direct beneficiary of a PRC development finance project. However, this does not imply complete autonomy of action. From 2018 to 2024, Indonesia’s Coordinating Ministry for Maritime and Investment Affairs (Kemenko Marves) provided strategic direction and risk management in multiple projects. All prospective development projects were reviewed by the Indonesia-China Joint Steering Committee (JSC) before an individual SOE or government ministry could sign on to a loan or joint venture agreement. Once cleared by the JSC, the Ministry of Finance would assess fiscal risk and, as needed, issue a sovereign guarantee before the debt is booked on the SOE’s balance sheet.

Cooperation is sometimes less successful between national and local levels. Experts interviewed for this research noted that local governments sometimes feel sidelined and uninformed about PRC-financed projects in their regions. Meanwhile, national processes are not immune to indirect influence. Beijing’s support for the Del Institute of Technology is a case in point. Del Institute is a higher education foundation in North Sumatra established by Luhut Binsar Pandjaitan, the former Coordinating Minister of Maritime Affairs and Investment under President Widodo. The Institute received a donation of books and tables from the Chinese embassy in 2018, and Chinese universities were invited to engage in research cooperation with the Institute in 2024.

The biggest funding recipients (in dollars) are not necessarily those with the highest number of projects. This phenomenon is not unique to Indonesia, as the PRC bankrolls many small-dollar goodwill projects globally in the social and educational sectors alongside fewer, more expensive megaprojects in power generation, critical mineral extraction, and mass transport. Only 7 percent of recipient entities were involved in five or more projects, while two-thirds participated in a single project (see Table 3.13).

Six entities defied the odds by receiving large and frequent infusions of Beijing’s development finance. This exclusive class includes: the Government of Indonesia (ministry unspecified), Perusahaan Listrik Negara, Lembaga Pembiayaan Ekspor Indonesia (LPEI), Bank Rakyat Indonesia, Garuda Indonesia, and two private telecom companies (Smart Telecom and Smartfren). Combined with Sinar Mas Group (the parent company), subsidiaries Smart Telecom and Smartfren would rank fourth on the list of highest-paid recipients.^[108] Indonesian state-owned enterprises were often recipients of funding, but so too were powerful private sector conglomerates like the Bakrie Group (Bumi Resources, Bakrie Telecom, and Bakrie Autoparts) and subsidiaries of Chairul Tanjung’s CT Corp (Trans Retail Indonesia and Trans Media Corpora).

4.1.1 From commitments to delivery: How fast does the money move?

Beijing is often lauded for delivering infrastructure projects quickly. However, the story in Indonesia is more uneven: there is wide variation in how consistently investments are implemented on time and in line with advertised commitments. PRC-financed projects across Indonesia take an average of 2.5 years to move from funds committed to projects delivered: 155 days from commitment to begin implementation and 706 days from implementation start to completion. This delivery schedule is considerably slower than in peer ASEAN countries like the Philippines (see Custer et al., 2024). Table 4.1 below breaks down the average wait times at each project phase.

These averages can conceal dramatic subnational differences.^[110] In provinces like Bengkulu, Gorontalo, and Jambi, the average PRC-financed development project took more than five years to complete (from commitment to completion). The degree to which project locations are easily accessible and benefit from strong local infrastructure could be a factor in delays. However, that does not explain the slower-than-expected delivery of projects in provinces like Central or West Java, which took about three years, on average. On the opposite end of the spectrum, projects in Central Papua demonstrate a breakneck pace that stands out, breaking ground and wrapping up within a matter of weeks.^[111] Projects in Aceh and Yogyakarta also tended to have a more expedited time frame, moving from start to finish well under a year.

The types of delays are also not necessarily uniform across provinces. In cases like Riau Islands (830 days) and South Kalimantan (457 days), PRC-financed development projects hit early snags due to delays between the initial commitment of funds (often the signing of an MOU or another agreement) and when project activities commenced. Other projects may have gotten off to a quick start, only to face slowdowns during implementation. East Kalimantan is a case in point: its five projects had the longest wait times in implementation (3877 days), despite getting off the ground reasonably quickly (139 days), on average.

As described in Chapter 2, Beijing bankrolls development projects in diverse sectors. This raises the possibility that what is being built could be equally or more consequential than where it is built, influencing how fast PRC-financed projects break ground and get delivered. Table 4.2 below breaks down the average number of days between key stages of the project lifecycle—commitment, implementation, and completion—for each sector.

Overall, Beijing appears capable of delivering quick results in narrowly targeted sectors or emergency contexts, but experiences more significant delays when delivering large-scale infrastructure projects. Sectors highly associated with physical and digital infrastructure (e.g., energy, transport, telecommunications) saw significant delays of more than 1,000 days between commitment and completion. This makes intuitive sense: these complex projects involve several factors (land acquisition, environmental assessments, coordination across contractors, and local capacity to absorb large-scale investments) that can push timelines beyond expectation. By contrast, the short-term, time-sensitive nature of food aid or emergency response may explain why projects in these sectors were comparatively much faster.

One of Beijing’s flagship projects, the Jakarta–Bandung High-Speed Rail, is a good example of how complexity can confound ambitious plans. Announced in 2015, the project became mired in delays related to challenges in land acquisition, environmental reviews, and COVID-19 (see Box 2 in Chapter 2). Completion, initially slated for 2019, was pushed back to October 2023. Costs similarly mushroomed, rising from US$4.3 billion to US$7.3 billion (Ibrahim and Karmini, 2023). As one expert who was interviewed noted, the project may have been driven more by ambition than economic rationale, citing overinflated expectations but a lack of realized benefits.

Variation in project timelines can also be shaped by the type of financing used. Aid-like assistance (e.g., grants, in-kind support, and no- or low-interest loans) can move quickly through the project cycle. On average, these projects are completed in 294 days, with minimal time between commitment, implementation, and delivery (see Table 4.3 below). Debt-like assistance (commercially-oriented, less concessional loans) has more protracted timelines, averaging over 1,000 days from commitment to completion.

This underscores an important point: longer implementation periods are not always indicative of delays due to poor execution or lack of commitment. As discussed in Chapter 2, Beijing typically employs a two-track model for its development finance projects. It often pairs big-ticket infrastructure projects financed with debt alongside goodwill social sector projects financed with aid. In this respect, it is unsurprising that Beijing can deliver more quickly on aid-like activities (e.g., donating supplies, providing training, and supplying emergency funds) than syndicated loans to support commercially-oriented projects like power plants, roads, and rail.

4.1.2 Failure to deliver? Project suspensions and cancellations

In addition to speed of delivery, another way to assess follow-through is by monitoring whether planned development projects are suspended or cancelled along the way. Suspensions and cancellations can and do occur in PRC-financed development projects. One of Indonesia’s ASEAN neighbors, the Philippines, had at least six cases each of suspended or cancelled projects (Custer et al., 2024). When these instances occur, they can signal waning appetite on the part of Beijing or misgivings among local counterparts about proceeding according to plan.

Notably, Indonesia had a lower level of project attrition, with only one known case of a suspended PRC-financed development project between 2000 and 2022. In 2008, China Eximbank issued a concessional loan valued at RMB 1.8 billion (approximately US$240 million) to support Indonesia’s state-owned Merpati Nusantara Airlines in acquiring fifteen MA60 aircraft from China’s Xi'an Aircraft Industrial Corporation (Custer et al., 2023; Dreher et al., 2022). The National Air Bridge Project, as it was named, was intended to strengthen regional air connectivity. Financing was offered with favorable terms, including a 2.5 percent interest rate, a 14.5-year maturity, and a five-year grace period.

After delivery of just two aircraft, the project was suspended, even though roughly 86 percent of the loan had already been disbursed. The breakdown stemmed from both supply-side and demand-side challenges. China Eximbank halted further disbursements after Merpati failed to meet its contractual payment obligations. Seeking to pressure the Indonesian government to help resolve the dispute, China Eximbank, China Development Bank, and the Bank of China jointly suspended disbursements to unrelated PRC-financed projects in Indonesia. This episode prompted a high-level diplomatic delegation to Beijing. Ultimately, Merpati’s deepening financial distress derailed the project, despite temporary government intervention. Limited commercial viability, weak institutional management, and creditor pressure eventually led the Indonesian government to abandon plans to revive the airline in 2015.

Compared with the Philippines, where multiple projects were derailed due to governance failures, legal disputes, and political unrest, Beijing’s Indonesia portfolio appears to have experienced fewer disruptions and invited less political scrutiny (Custer et al., 2024). This may or may not be a good thing. One expert interviewed for this project argued that PRC-financed projects may be seen as too big to fail, explaining: “It’s hard for the government to say no to Chinese projects, as they are too large to be let go or closed down.” This can be especially when projects are designated as part of Indonesia’s Proyek Strategis Nasional (PSN), which prioritizes high-impact infrastructure.

4.2.1 Early warning indicators of ESG risk in PRC-financed projects

Major investments in infrastructure and key industries—whether initiated by local governments, private companies, or development partners like China—can reshape communities in profound ways. While such projects hold transformative potential, they also carry substantial risks, particularly regarding ESG outcomes. To mitigate these risks, leading development actors such as the World Bank have established stringent ESG safeguards, applying them from project design through implementation.

Beijing is frequently criticized for favoring speed and cost-efficiency over strong ESG performance in its overseas development finance (Parks et al., 2023). Yet, distinguishing objective fact from subjective perception is not straightforward. To address this gap, Parks et al. (2023) introduced a structured methodology to evaluate how Chinese state-owned financiers incorporate ESG risk management protocols into the projects they support.

Their framework consists of 27 criteria assessing whether projects include: (i) clear ESG rules and standards; (ii) oversight mechanisms to ensure compliance; and (iii) enforcement provisions to respond to violations. These criteria span eight environmental, seven social, and twelve governance safeguards, offering a comprehensive lens for evaluating ESG risk as of 2021, the most recent year for which data is available (see the Technical Appendix for more details).

Over half of the PRC’s global development finance portfolio (by dollar value) is associated with at least one type of ESG risk (Parks et al., 2023). Indonesia fares somewhat better than the global average, but not by a wide margin: 26 percent of its projects carry some form of ESG risk (Figure 4.4). Indonesia’s exposure to environmental and social risks is slightly below the global average. Its exposure to governance risk is dramatically lower.

Several factors could help explain this divergence. The Indonesian government may have stronger mechanisms than its global peers to monitor and manage governance risks in externally funded projects. Alternatively, the composition of China’s portfolio in Indonesia could skew toward sectors less prone to governance challenges, such as infrastructure projects with state-owned implementers rather than public-private partnerships. Over time, Chinese lenders have gradually strengthened their ESG practices (Parks et al., 2023), so the relatively newer vintage of many PRC-financed projects could also contribute to these lower risk profiles in Indonesia.

It is important to note that lower recorded risk does not necessarily mean lower actual risk—variation in disclosure quality or risk detection could also be at play. Some observers argue that PRC-financed development projects frequently bypass environmental due diligence altogether. One interviewee contrasted Beijing’s practice with that of other foreign investors, stating that the PRC is quite willing to proceed without environmental assessments in its projects, unlike Japan, which routinely applies such requirements.

To what extent is Beijing learning from past mistakes and improving ESG safeguards in its Indonesia portfolio over time? The data tells a story of uneven progress. Most years saw relatively few PRC-financed projects flagged for ESG risks. Two years, 2016 and 2017, were outliers, as a few large projects triggered serious environmental, social, and, at times, governance alarm bells (Table 4.5 below). ESG risks were not evenly spread across Beijing’s portfolio; instead, they were overwhelmingly concentrated in the energy and transport sectors (Table 4.6 below). This suggests ESG compliance may not be consistent across all sectors or project implementers.

Flagged in six different years, energy projects were frequent offenders for both environmental (e.g., air pollution and flooding) and social (e.g., safety incidents and displacement) risks. In one example, Batam residents demanded that the Tanjung Kasam coal-fired power plant, financed by China Eximbank, be shut down after the installation released large volumes of ash, leading to respiratory and skin ailments (Custer et al., 2023; Dreher et al., 2022). The Sorik Marapi geothermal power project is another cautionary tale: a high-pressure burst of hydrogen sulfide gas killed five people and injured 24 others in 2021 (ibid). The disaster highlighted lapses in risk management and emergency response.

The transport sector also included several high-risk projects, most notably the Jakarta–Bandung High-Speed Rail, a US$5.29 billion initiative co-financed by the China Development Bank (Custer et al., 2023; Dreher et al., 2022). The project faced criticism over flawed environmental assessments, worker fatalities, and community disruption (ibid). Additionally, it was associated with severe flooding, compromised drainage, and collateral damage to nearby homes (ibid).

Other sectors, like industry, mining, and construction, accounted for fewer risks but still registered ESG concerns, particularly around labor conditions and protests by affected communities. Governance risks were comparatively rare, occurring only once, in a 2008 energy project involving alleged embezzlement during land acquisition. However, this lower frequency could suggest that procedural irregularities may be harder to detect or are less often documented.

4.2.2 Exposure to performance risk in Chinese-financed projects

The ability of Chinese implementers to deliver PRC-financed development projects in Indonesia on time and responsibly varies widely. The choice of implementer is therefore not a trivial one—it can have significant implications for project success and the well-being of communities affected by construction and land use. In this section, we analyze how Chinese firms compare across three dimensions of performance risk: (i) timeliness of delivery from start to completion; (ii) exposure to ESG risks; and (iii) history of financial misconduct, as captured by sanctions from major multilateral development banks.

Some implementers experienced moderate delays; others performed far worse. For instance, PT Kereta Cepat Indonesia China (KCIC), the joint venture behind the Jakarta–Bandung High-Speed Rail, recorded an average delay of 1,295 days, over three and a half years behind schedule. Chinese firms, including Dongfang Electric Corporation (DEC), Suzhou Thvow Technology Co., Ltd., China Harbour Engineering Company (CHEC), and China Road and Bridge Corporation (CRBC), faced delays of several hundred days each (see Table 4.7 below). These patterns suggest persistent challenges across a range of state-owned and joint venture actors.

Thirteen top implementers of PRC-financed projects in Indonesia were previously sanctioned (directly or through a parent company) by the World Bank or Asian Development Bank for fraudulent or corrupt practices. Others were flagged in Parks et al. (2023) for significant ESG risks, such as weak environmental safeguards or adverse social impacts on local populations. Given the scale and strategic importance of PRC development finance in Indonesia, these performance issues are non-negligible.

This raises a critical question: how much of Beijing’s development finance portfolio in Indonesia is associated with risky implementers, based on ESG risk and sanctions for financial practices? The answer is in the billions. We estimate that 43 percent (US$30 billion) of Beijing’s commitments to Indonesia between 2000 and 2023 were channeled via firms with documented ESG exposure or prior sanctions (see Table 4.8 below). Prominent examples include: US$4.9 billion to China Energy Equipment Engineering, Ltd. (CEEC) and its affiliates; US$1.9 billion to China Road and Bridge Corporation (CRBC); and US$2.4 billion to Shandong Electric Power Engineering Consulting Institute Corp. (SDEPCI).

These implementers not only received large sums of money, but they also did so repeatedly. A subset of implementers—such as China Harbour Engineering, China Road and Bridge Corporation, and PowerChina—have been sanctioned for questionable business practices and/or flagged for ESG risks. Collectively, these firms account for a substantial share of China’s project portfolio in Indonesia.

This continued reliance on high-risk firms suggests that Beijing does not always treat past performance—measured by delays, ESG issues, or sanctions—as a disqualifying factor. Strategic priorities, cost, or political ties may outweigh risk considerations in China’s overseas contracting decisions. Table 4.8 below highlights the top ten Chinese implementers by project count and value.

Financiers that channel Beijing’s development dollars also shape risk exposure (see Table 4.9). Some, such as the Industrial and Commercial Bank of China and China Development Bank, had relatively few projects flagged for ESG concerns (6-12 percent). Yet these projects accounted for a disproportionate share of total finance value (32-45 percent). Others, like China Construction Bank and the Agricultural Bank of China, exhibited high exposure across project count and value: over 80 percent of their portfolios were tied to flagged projects. Power Construction Corporation of China (PowerChina) is a top financier that also appears as a sanctioned implementer, underscoring the blurred lines between financier and contractor roles in some PRC-financed projects.

Taken together, these patterns suggest that ESG risk is not limited to a few problematic implementers but reflects a broader financing ecosystem in which high-risk projects continue to receive backing from major state-owned banks.

4.3.1 Winning hearts and minds? Perceptions and financing

Earlier chapters of this report emphasized that Beijing employs a two-track model in its development finance in Indonesia. It uses debt financing to bankroll the ambitious infrastructure priorities of Indonesian leaders, and it supplies traditional aid to build goodwill with local communities. Beijing has intentionally deployed its state-directed development finance to crowd in Chinese foreign direct investment from the private sector to open markets and amplify influence. The PRC has many goals for its economic statecraft, one of which is to influence public perceptions and project soft power (Mathew and Custer, 2023). China’s engagement in Indonesia has evolved over time, reflecting diverse strategies pursued under different Indonesian presidencies (see section 2.2 in Chapter 2). Although leaders are critically important to advancing Beijing’s national interests, so are the attitudes of foreign publics, particularly in electoral democracies like Indonesia, where the public’s preference for candidates can influence government policy and relations with foreign powers (Freedom House, 2024).

All things being equal, if money buys love, one might expect to see a dramatic improvement in the Indonesian public’s perceptions of China over the last two decades, tracking with the sizable growth in Beijing’s economic engagement. Yet public attitudes towards China, as measured by the Gallup World Poll (2006-2024), did not live up to this rosy expectation (Figure 4.10). Instead, approval of the leadership of the PRC peaked around 2008. It subsequently declined, even though the post-2008 period is when Indonesia began seeing much larger inflows of Beijing’s development finance and Chinese FDI.

Importantly, Indonesian citizens’ reactions to Beijing do not appear to reflect broader pessimism toward other leaders. Public approval of Indonesian leaders surged just before President Yudhoyono’s 2009 re-election (nearly 90 percent), remaining relatively high and stable through presidential transitions to Widodo and Subianto (65-80 percent). These high approval levels could reflect general satisfaction with Indonesia’s maturation as a democracy (Yudhoyono being the country’s first directly elected president) or the specific policies pursued by leaders. Indonesians may be more inclined to attribute the benefits of infrastructure-led growth to domestic politicians than to Chinese investment.

Beijing was not alone in contending with declining favorability. Indonesians’ attitudes toward Tokyo and Washington also soured between 2006 and 2024. Japan, the best performer among the three foreign powers, still only earned the approval of one-third of the Indonesians surveyed. Nevertheless, Tokyo’s approval ratings consistently outperformed others over the 18-year period, perhaps buoyed by Japan’s visibility as a long-standing, uncontroversial, and generous development partner. Intriguingly, Japan’s favorability did not suffer, even as it was displaced by the PRC as Indonesia’s top development finance supplier.

The competition for hearts and minds was much tighter between China and the United States. Forty-five percent of Indonesians approved of U.S. leadership in 2008; only 24 percent said the same by 2024. Washington’s position in the eyes of Indonesians was also more volatile relative to Beijing; at times, public opinion gravitated toward the U.S., while at other times, the PRC had the upper hand.

To examine these trends more closely, we ran statistical models to test how exposure to PRC development finance (DF) or Chinese foreign direct investment (FDI) may influence Indonesian public opinion about their own political leadership and that of Beijing. We considered four inputs: (i) the level of PRC DF dollars (including aid and debt instruments); (ii) the number of DF projects Beijing bankrolled; (iii) the level of inbound FDI from China to Indonesia; and (iv) the number of FDI projects from China to Indonesia. We examined two outcomes: (i) Indonesian approval of the PRC’s leadership; and (ii) Indonesian approval of their own government.

The statistical model tests whether these two dimensions of Indonesian public opinion appear to move in relation to our four financial measures (the value and number of DF and FDI projects) at the subnational level.^[112] The model accounts for individual attributes such as age, gender, education, employment status, rural or urban location, and household income.^[113] This process identifies whether a relationship exists, but does not tell us why that is the case. Detailed results and additional information about how the statistical model was constructed are available in the Technical Appendix to this report.

If Beijing was hoping to convert economic statecraft into more favorable public opinion, then the results will be a disappointment. None of the tests yielded a statistically significant relationship between provinces’ exposure to Beijing’s development finance or Chinese FDI and approval of the PRC’s political leaders, for better or worse.^[114] There was a discernible negative relationship worth noting: exposure to Beijing’s development finance and FDI projects consistently corresponded (across all model specifications) with lower levels of approval among Indonesians for their government in Jakarta.^[115] These results, though worth investigating further, should be interpreted cautiously, as they were not statistically significant.

In short, Beijing faces an uphill battle in converting its considerable financial resources (via development finance and FDI) into measurable reputational gains with Indonesia’s public. Why might this be? Stepping back from the models to reflect on the broader context, we put forward three possible explanations.

First, Indonesians may be exposed to other facets of Beijing’s decision-making beyond its development finance and FDI investments. If these other interactions are predominantly negative, such as in public backlash to Beijing’s maritime claims in the Natura Sea or its treatment of Uyghur Muslim minorities in China’s Xinjiang province, that could potentially cannibalize approval gains China might otherwise have made.

Second, as Indonesians have expressed concerns over whether the country has become too reliant or dependent on Chinese investment in critical industries, this growing unease could neutralize appreciation for Beijing’s financial support. Relatedly, the Asian Barometer, another citizen survey, found that the share of Indonesians who said that China had a “good influence” in their country had declined by 28 percentage points between 2011 and 2021.^[116]

Third, it is uncertain whether and how Indonesians’ attitudes towards the ethnic Chinese-Indonesian minority may color their perceptions of mainland China, regardless of Beijing’s economic overtures. Two-and-a-half decades after the May 1998 riots disproportionately targeted Chinese-Indonesians in Jakarta, Sinophobia and inter-ethnic tension are still visible, with occasional bouts of unrest and lingering suspicions of ethnic Chinese as outsiders beholden to Beijing for direction (Sritharan and Rizkillah, 2024; Herlijanto, 2017).

Citizen attitudes matter, but the perceptions of Beijing held by Indonesian public, private, and civil society elites may be more consequential to advancing the PRC’s interests. AidData fields surveys to monitor perceptions of the PRC as a development partner in 100+ countries, including Indonesia (Custer et al., 2025). While the data on Indonesian elites is insufficient for a standalone quantitative analysis, the broader survey offers valuable insights into regional perspectives on China as a development partner, and we can pair this with qualitative insights from the sample of Indonesian respondents.^[117]

Nearly 85 percent of leaders across East Asia and the Pacific who worked with the PRC said it was quite or very influential in shaping domestic priorities in their country. This held steady across surveys in 2020 and 2024. The PRC’s regional influence was less perceptible in similar surveys conducted in 2014 and 2017. In recent years, Beijing has sought to professionalize its capacity to deliver development (Mathew and Custer, 2023), which may have contributed to dramatic gains (+40 percentage points) in its perceived helpfulness among regional leaders in implementing policies and programs, which skyrocketed from a meager 47 percent in 2020 to 86.7 percent by 2024.

Compared to their regional peers, Indonesian leaders saw Beijing as more influential in shaping the development agenda in Indonesia. However, the share of leaders who viewed this influence as positive plummeted by half between 2020 and 2024 (Figure 4.11). Their perspectives on Beijing’s helpfulness likewise soured in recent years.

4.3.2 Public good or public harm? Outcomes of Chinese financing

Over two decades, Beijing’s state-directed development finance and private Chinese foreign direct investment (FDI) have poured into Indonesia’s strategic sectors—from energy and extractives to transportation and telecommunications—at a scale that few external actors can match. Advocates and naysayers alike point to individual projects as generating benefits or costs for Indonesia’s communities, institutions, and physical environment. However, the broader influence of economic engagement with China on Indonesia’s development trajectory is not well understood.

In this section, we use a series of statistical models^[118] to assess whether and how the PRC’s portfolio of development finance (DF) and FDI investments is associated with key economic, environmental, social, and governance outcomes in Indonesia.