Indonesia, explained.
Workers at a river affected by gold mine tailings after cutting down dead trees in Timika, Papua Province, Indonesia (Ulet Ifansasti/Getty Images)
Eastern Indonesia needs clean energy investment, not another extractive cycle – and China is now positioned to provide it.
Subscribe to The Informer for monthly expert analysis, and to Events for advance notice of visiting world leaders and distinguished guests.
You may unsubscribe from Lowy Institute newsletters at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
China’s chance in Papua to bolster Indonesia’s green credentialsChina’s chance in Papua to bolster Indonesia’s green credentials
Indonesia’s latest announcement of expanded cooperation with China in Papua deserves attention not because it signals geopolitical tension, but because it may finally bring long-overdue economic focus to one of the country’s most underdeveloped regions.
Last week, the Indonesian government confirmed that it is working with China on agricultural and educational initiatives in Papua, including vocational schools in Merauke and agricultural research centres aimed at improving rice productivity and reducing poverty.
For years, Papua barely featured in China’s broader investment map in Indonesia. According to the China-Indonesia Provincial Index from the Center of Economic and Law Studies (CELIOS), Chinese capital was concentrated largely in industrial and downstream-processing hubs such as Sulawesi, Java, and Sumatra. Papua remained peripheral to Beijing’s strategic economic priorities. That is why China’s growing interest in eastern Indonesia should not immediately be interpreted as a threat. In many ways, it is a necessary correction.
Indonesia should resist framing every Chinese investment initiative through the lens of geopolitical rivalry.
Papua has long faced a development imbalance that successive Indonesian administrations have struggled to solve. Infrastructure gaps, high logistics costs, limited industrial activity, and uneven access to education continue to constrain growth in the region. While western Indonesia has benefited from decades of industrial concentration and foreign direct investment, Papua has often remained economically isolated despite its enormous resource wealth.
The question, therefore, is not whether China should expand its footprint in Papua. The real question is what kind of footprint Indonesia should encourage.
The answer should be clear: energy-transition-focused investment.
If China wants to play a larger role in Papua, then its investments should prioritise renewable energy infrastructure, clean industrial development, sustainable transportation systems, and green manufacturing capacity. Papua and eastern Indonesia urgently need reliable and affordable electricity to unlock economic potential. At the same time, Indonesia has committed itself to accelerating the transition toward net zero emissions. These two goals should reinforce one another.
Too often, development in resource-rich regions has followed an extractive model that delivers short-term gains while creating long-term environmental and social vulnerabilities. Papua cannot afford another cycle where raw commodities leave the region while local communities continue to face poverty and weak infrastructure. Sustainable energy investment offers a different pathway — one that can create jobs, improve connectivity, lower energy costs, and support broader industrial diversification.
Processing facilities stand at Freeport McMoRan Inc Grasberg copper and gold mining complex in Papua province, Indonesia (Dadang Tri/Bloomberg via Getty Images)
China is well placed to contribute here. In the past decade, Chinese companies have become dominant global players in solar technology, battery manufacturing, electric mobility, and renewable-energy supply chains. Beijing’s expertise in scaling green infrastructure could help Indonesia accelerate electrification in remote regions where conventional energy systems remain expensive and inefficient.
Papua cannot afford another cycle where raw commodities leave the region while local communities continue to face poverty and weak infrastructure.
This matters enormously for Papua. Many communities across eastern Indonesia still experience limited access to stable electricity, constraining everything from education to healthcare and small-business development. Renewable energy systems – especially decentralised solar networks, battery storage, and clean-grid expansion – could transform local economies without replicating the environmentally destructive patterns associated with traditional extractive development.
This would also align with President Prabowo Subianto’s broader economic agenda. Indonesian officials have framed the new cooperation with China as part of a wider strategy for poverty alleviation, job creation, and food security. Vocational schools and agricultural research centres in Merauke are intended to improve human capital and create new economic opportunities for Papuans.
That foundation is important because energy transition is not only about infrastructure. It is also about preparing workers and communities for participation in a changing economy. Papua needs technical education, vocational training, and research institutions that allow local populations to benefit directly from future investment rather than remaining spectators to outside development.
There is also a strategic dimension to this shift. Southeast Asia is increasingly becoming an arena for competition among major powers, and Indonesia is navigating a delicate balance between maintaining productive ties with China while preserving its long-standing nonaligned foreign policy tradition. Papua’s growing strategic significance means foreign investment there will inevitably attract scrutiny.
But Indonesia should resist framing every Chinese investment initiative through the lens of geopolitical rivalry. Jakarta’s priority should remain national development outcomes. If China is prepared to support projects that strengthen local economies, expand renewable energy access, and help Indonesia meet its climate commitments, then such cooperation should be welcomed – provided it operates transparently and under Indonesian regulatory oversight.
Transparency and accountability remain crucial. Development in Papua carries political sensitivities and complex social realities. Local communities must have a meaningful role in decision-making processes. Environmental protections cannot become secondary concerns. Foreign investment should strengthen social inclusion rather than deepen inequality or fuel perceptions of exploitation.
Indonesia must also ensure that Papua’s development remains diversified. China can become an important partner, but not the only one. Partnerships with Japan, South Korea, Europe, multilateral development banks, and domestic investors will also be essential to creating a balanced and resilient development base in eastern Indonesia.
Yet China’s new attention to Papua represents an opportunity that should not be dismissed reflexively. For too long, eastern Indonesia has existed outside the main circuits of industrial investment and infrastructure modernisation. If Beijing now wants to engage more deeply in Papua, Indonesia should steer that engagement toward sectors that create sustainable long-term value.
Papua does not need development that merely extracts wealth from the ground. It needs investment that builds human capital, expands clean energy access, supports resilient industries, and connects the region to Indonesia’s future economy.
China’s expanding footprint in Papua will ultimately be judged not by how much money flows into the region, but by whether that investment helps eastern Indonesia participate meaningfully in the country’s transition toward a greener and more equitable future.
About the authors
Yeta Purnama
Yeta Purnama is a researcher at the Center of Economic and Law Studies (CELIOS) in Jakarta, Indonesia.
Muhammad Zulfikar Rakhmat
Muhammad Zulfikar Rakhmat Director of China-Indonesia Desk at Center of Economic and Law Studies (CELIOS) in Jakarta.
The most-pressing world events explained by Lowy Institute experts and global contributors, in your inbox, every Thursday.
You may unsubscribe from The Interpreter at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
