US president prepares to visit Indonesia, Beijing has announced plans to invest $6.6bn in the country, one of Asia’s best-performing economies. Indonesia is hungry for foreign investment - to improve infrastructure and growth - and hefty figures are not expected to be announced during Obama’s long-anticipated homecoming.
For months, China and America have both sought influence in Indonesia, south-east Asia’s only member of the G20 and an emerging democracy of over 200m people. Chinese premier Wen Jiabao cancelled a trip after a major earthquake. Obama postponed twice, first to push health care reform and then handle the BP oil spill.
But on Monday, Zhang Zijun, China’s deputy foreign affairs minister, announced the major investment plans at the end of a four-day visit to Indonesia, during which he was accompanied by Chinese investors.
“The investment will play an important role in Indonesia and will strengthen cooperation between China and Indonesia,” the deputy minister was quoted by the Jakarta Globe as saying.
American oil and gas companies and mining giants have huge operations in Indonesia. But in recent years, China has started flexing its economic muscles, making significant investments in coal and, more recently, infrastructure and power generation.
Indonesia aims to spend $150bn on infrastructure by 2014, during the second term of President Susilo Bambang Yudhoyono, but with a tiny government budget, roughly two-thirds of that will have to come from the private sector.
During his 20-hour visit to Indonesia this week, Obama will sign a “comprehensive partnership” agreement to boost bilateral trade. But what Indonesia really wants is deep-pocketed, long-term investment in roads, railways, bridges and airports. That hasn’t escaped China’s notice.