THE NICKEL DOWNSTREAM POLICIES OF INDONESIA AND ECONOMIC DIPLOMACY TO CHINA

Abstract

As a developing country with abundant mineral wealth, Indonesia is pushing for a nickel downstream industry policy as a strategic policy to boost the national economy. To encourage the downstream of the nickel industry, the government controls exports of raw materials or nickel ore and encourages the construction of smelters or nickel processing industries. This research focuses on the implementation of nickel downstream policies to produce high-added-value products and their impact on Indonesia's economic diplomacy toward China. This study aims to determine the implementation of downstream nickel industry policies and their implications for Indonesia's economic diplomacy towards China in the investment and trade sectors. This study uses qualitative methods and focuses on the theory of economic diplomacy according to Kishan S. Rana, which is described in 4 phases: Economic Salesmanship, Economic Networking, Image Building/Nation Branding, and Management Regulation & Resources. In this study, it was found that in the implementation of the Nickel Industry Downstream Policy which was marked by the enactment of the Mineral and Coal Law No. 4 of 2009 in 2014 and its changes in Law No. 3 of 2020 which has been in force since 2020, has had an impact on Indonesia's Economic Diplomacy towards China, where this can be seen from: 1. In every business forum and promotional investment conducted with China, Indonesia is no longer focused on investing in the mining sector but is more focused on investing in smelter construction to produce processed nickel products that have a higher added value, 2. Indonesia no longer relies on exports of nickel ore to add to the country's economy but exports of products with high added value added (Ferronickel, Nickel Pig Iron, Nickel Matte) which is characterized by a ban on exports of raw materials since 2014 and continued in 2020, 3. The Nickel Downstream policy has caused a shift in government priorities which previously only prioritized the nickel industry for stainless steel products and then began to focus on developing the EV battery industry to make Indonesia a global supply chain of EV batteries, 4. The increasing strategy of Indonesia's Economic Diplomacy towards China through various kinds of investment & trade promotions and the increasing number of multi-actor roles through special cluster units formed.