Unpacking Indonesia’s Major Trade Imbalance with China
Indonesia recorded a substantial trade deficit of $10.69 billion with China during the first half of 2025, a figure that represents the largest negative trade balance with any of its trading partners. This significant imbalance is a direct consequence of Indonesia’s export and import dynamics with its largest commercial partner. Over the six-month period from January to June, Indonesia’s exports to China totaled $29.31 billion, while imports from the country amounted to a far greater $40 billion. The primary drivers of this persistent deficit were Indonesia’s high import volumes of key goods such as machinery and mechanical appliances, electrical machinery and equipment, and vehicles and their parts. This trade relationship highlights Indonesia’s reliance on China for essential manufactured goods, creating a challenging imbalance that the nation must navigate within its broader economic strategy to foster more balanced trade with its partners.
A Pattern of Bilateral Deficits with Key Partners
While the trade gap with China stands out as the most significant, it is not an isolated case, as Indonesia also faced considerable bilateral deficits with other major trading nations. Australia ranked as Indonesia’s second-largest bilateral trade deficit partner for the same period, with a gap of $2.39 billion. This was largely due to imports from Australia, which amounted to $4.2 billion, heavily outweighing Indonesian exports to the country, which were valued at only $1.81 billion. The deficit with Australia was primarily driven by a demand for essential commodities such as cereals, mineral fuels, and precious metals. Similarly, the third-largest trade gap was recorded with Brazil, where Indonesia had a deficit of $830 million, with imports valued at $1.96 billion against exports of just $1.14 billion. These figures collectively illustrate a clear pattern where Indonesia’s overall trade success is being challenged by substantial imbalances with key bilateral partners.
A Strong Overall Surplus Defies Bilateral Gaps
Despite facing persistent and significant trade deficits with China, Australia, and Brazil, Indonesia’s overall trade balance has remained remarkably resilient, maintaining a strong surplus. In the first half of 2025, the country’s total trade surplus reached $19.48 billion, representing a robust 25 percent increase over the previous year’s figure for the same period. This positive momentum is a reflection of total exports reaching $135.41 billion, which exceeded imports valued at $115.94 billion. This impressive performance highlights a continuing pattern of overall trade strength, extending the country’s streak of trade surpluses to an impressive 66 consecutive months. It demonstrates that while Indonesia grapples with the complexities of trade with specific nations, its broader economic strategy, particularly its strong export performance to other major markets, continues to yield a solid and consistent positive trade balance.
