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Indonesia and the People’s Republic of China have agreed to enter a new phase of bilateral defense relations following a “2+2” ministerial meeting in Jakarta on Friday (August 21). The most significant agreement reached is the construction of a joint ammunition, missile, and rocket factory in Indonesia under a technology transfer scheme, targeted to begin operations by 2027 at the latest.
Indonesian Defense Minister Sjafrie Sjamsoeddin revealed that the defense industry cooperation will involve state-owned strategic enterprises PT Pindad and PT Len Industri. “China will transfer technology so we can build the factory together in Indonesia. We will cooperate on an ammunition factory, including missiles, rockets, and so on,” Sjafrie said after the meeting at the Ministry of Foreign Affairs.
Strategic Dialogue and Military Exercises
The meeting, also attended by Indonesian Foreign Minister Sugiono, Chinese Foreign Minister Wang Yi, and Chinese Defense Minister Admiral Dong Jun, was the second of its kind following the inaugural meeting in Beijing in April 2025.
Beyond the ammunition factory, both countries agreed to expand joint military exercises. Indonesia formally invited the People’s Liberation Army (PLA) to participate in the Heping Garuda joint exercise, planned to be held around Sumatra in September or October 2026. “We also invite the Chinese armed forces to participate in joint exercises, such as Heping Garuda, which is a concrete example of the relationship between the Indonesian National Armed Forces and the Chinese armed forces,” Sjafrie explained.
Personnel cooperation has also been expanded. Indonesia will send TNI personnel—from the officer level down to non-commissioned officers and enlisted personnel—to China for military education and training. “We have agreed to enhance defense cooperation. This is not only material cooperation but also cooperation to improve personnel capabilities,” Sjafrie said.
Advanced Technology and Economic Cooperation
Beyond conventional defense, both countries agreed to expand cooperation in advanced technology, including artificial intelligence (AI), joint communications satellite development, green energy, and fisheries. Foreign Minister Sugiono stated that both sides also discussed strengthening food, energy, and mineral security through the development of supporting industries.
This cooperation cannot be separated from the broader economic context. Bilateral trade between the two countries reached approximately $167 billion in 2025. In the first half of 2026 alone, combined investment from mainland China and Hong Kong reached $11.5 billion.
Legal Foundation and Long-Term Commitment
Defense Minister Sjafrie emphasized that bilateral defense relations are based on the Defence Cooperation Agreement (DCA) signed in 2007 and ratified by Indonesia through Law Number 6 of 2016.
Chinese Foreign Minister Wang Yi described the “2+2” mechanism as the first ministerial-level strategic platform China has established globally. “China and Indonesia, as major developing countries and key members of the Global South, should foster closer solidarity and cooperation. This bears significance far beyond the bilateral dimension,” Wang Yi said.
Meanwhile, Chinese Defense Minister Dong Jun stated that bilateral defense cooperation has become “a model for new-type defense cooperation among Global South and major developing countries”.
From Exercises to Industrialization
The pattern emerging from this meeting reveals a phased escalation: joint exercises → personnel education → technology transfer → domestic production → defense industrialization. Indonesia is no longer merely a market for foreign defense equipment but aspires to build its own production capacity—an ambition that has long been a weakness in the national defense industry.
Notably, there was no discussion regarding the purchase of J-10 fighter jets from China, as had been previously rumored. The focus was directed toward building domestic production capacity, not merely procuring defense equipment.
Critical Notes
While offering significant opportunities for defense industry independence, this cooperation also carries risks. Technology transfer can become dependency transfer if critical components, software, maintenance systems, and supply chains remain outside Indonesia.
Defense analysts emphasize the importance of ensuring binding local content requirements, maintenance and supply chain independence, and a multiple-supplier strategy to prevent Indonesia from becoming trapped in technological dependence on a single country.
Defense Minister Sjafrie stressed that the meeting “only discussed bilateral cooperation” and “there was no discussion about the US”. However, deepening defense cooperation with China could potentially create perceptions of a shift in alignment within Indonesia’s “free and active” foreign policy.
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