Indonesia-China Financial Cooperation Strengthens Economic Resilience
Jakarta (ANTARA) -
National Economic Council Chairman Luhut Binsar Pandjaitan stated that financial cooperation between Indonesia and China can make trade and investment more efficient, while strengthening confidence and Indonesia’s liquidity resilience amid external uncertainties.
“Trade patterns are shifting. Supply chains are being recalibrated. Capital is becoming more selective,” Luhut said during a multilateral business dialogue discussing local currency transactions in Jakarta on Friday, as quoted from Xinhua News Agency on Monday.
According to Luhut, strengthening regional cooperation, including the availability of a more credible regional financial safety net, is increasingly important amid global economic dynamics.
He assessed that settling transactions using local currencies can reduce transaction costs, increase certainty, and reduce exposure to exchange rate volatility.
“At a deeper level, this is about resilience. It is about ensuring that our economic architecture evolves with the changing world, and that our economies have greater room to manoeuvre in times of uncertainty,” Luhut said.
Indonesia and China previously renewed their bilateral currency swap agreement in January 2025, increasing the swap line value to 400 billion yuan.
Meanwhile, Bank of China Vice President Yang Jun stated that Indonesia, as ASEAN’s largest economy, plays an important role in promoting regional cooperation and local currency transaction settlement mechanisms.
He explained that the Indonesia-China Local Currency Settlement (LCS) mechanism, launched in 2021, has been upgraded to Local Currency Transaction (LCT) in 2025, with its scope expanded from trade and investment to all areas of the balance of payments.
As an authorised cross-currency market maker in the Indonesia-China and Indonesia-Thailand-Malaysia LCT mechanisms, Bank of China has facilitated local currency transaction settlements for around 200 Chinese and Indonesian companies.
The bank is also committed to continuing coordination with central banks, regulators, and related financial institutions to strengthen the local currency transaction mechanism in the region.
On the same occasion, Minister Counsellor of the Chinese Embassy in Indonesia Li Hongwei stated that the value of bilateral trade between Indonesia and China exceeded 150 billion US dollars in 2025 and reached 167.49 billion US dollars, while Chinese direct investment in Indonesia was recorded at 7.5 billion US dollars.
Li noted that financial institutions of both countries have built a multi-level financial services system supporting a number of strategic cooperation projects.