Indonesia’s decision to launch a China-built anode plant for electric vehicle (EV) batteries may seem like a significant step toward advancing its position in the global EV supply chain. However, this move raises several concerns that could have long-term negative implications for the country’s economy, environment, and political autonomy. It can be argued that this is a very short-sighted move when looking at all of these factors together.
One of the core concerns with this project is the deepening economic dependence on China. Chinese investments often come with attractive financial incentives, but they also bring a high level of economic influence, coercion, and pressure giving China the power to control a crucial part of the EV battery production process, Indonesia is in fact risking giving up, at least to some extent, its economic sovereignty. This will also have knock-on effects in the long run, this could potentially make Indonesia vulnerable to economic coercion and limit its ability to make independent decisions regarding its own industrial policies, which should be a very daunting thought to most of us.
China’s track record in environmental standards is far from exemplary to say the least, having been criticized for its lax environmental regulations and the resulting ecological damage. Anode production is an energy-intensive process that involves the use of hazardous materials. If environmental safeguards are not strictly enforced, which is easier said than done, Indonesia could face significant ecological degradation, particularly in regions near the plant. Moreover, there is a real risk that Chinese companies may transfer their environmentally damaging practices to Indonesia, exacerbating local pollution and harming the country’s rich biodiversity with no easy fixes either.
The lack of meaningful technology transfer is another cause for concern. While China may be willing to build and operate these plants, it often keeps the most advanced technologies within its borders, severely limiting the opportunity for Indonesia to develop its technological capabilities and build its own technological capacity for the future. This could prevent Indonesia from building a self-sustaining EV battery industry and lock the country into a perpetual dependency on Chinese expertise and machinery.
Indonesia’s geopolitical position is already precarious, given the growing influence and aggression of China in Southeast Asia and beyond. By relying heavily on China for critical infrastructure like EV battery plants, Indonesia risks compromising its strategic autonomy. In times of geopolitical tension, China could leverage its control over this vital industry to exert pressure on Indonesia, forcing the country to align with Chinese interests even when they conflict with national priorities.
The influx of Chinese-built plants and technology can also undermine local industries and workforce development. If Indonesia becomes too reliant on Chinese imports and expertise, local manufacturers may find it difficult to compete, leading to job losses and stunted growth in the domestic manufacturing sector. Additionally, Chinese firms often bring their own workers, which can limit job opportunities for Indonesian laborers and reduce the economic benefits of such investments.
While the launch of a China-built anode plant for EV batteries in Indonesia might appear to be a positive development on the surface, the underlying risks and long-term consequences make it a highly questionable strategy. Indonesia should prioritize building its own technological capabilities, enforcing strict environmental standards, and diversifying its economic partnerships to ensure that its EV battery industry develops in a way that benefits the nation as a whole. Reducing dependency on an increasingly aggressive China is essential for maintaining economic sovereignty, environmental integrity, and strategic autonomy.
