Regional Comprehensive Economic Corridor

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The Regional Comprehensive Economic Corridor (RCEC) is a bilateral economic development initiative between Indonesia and China, formally established in 2018 as part of China's Belt and Road Initiative (BRI). The corridor encompasses four Indonesian regions: North Sumatra, North Kalimantan, North Sulawesi, and Bali, collectively referred to as "3 North + 1 island." [1]

The RCEC was conceived during the presidency of Joko Widodo (2014-2024) as part of his Global Maritime Fulcrum policy. In May 2018, Indonesian Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan signed a memorandum of understanding with Chinese counterparts at the National Development and Reform Commission of China. The plan received approval at the 2019 Belt and Road Forum. [1]

While RCEC projects have faced challenges, Chinese capital has been redirected toward Indonesia's nickel industry in regions outside the corridor, particularly Central Sulawesi and North Maluku. The Indonesia Morowali Industrial Park alone has received over US$34.3 billion in loans from Chinese state-controlled banks, representing a shift toward critical mineral processing rather than the original corridor vision. [1] This redirection illustrates what researchers describe as "uneven and combined development," where capital flows respond to global market pressures and strategic priorities rather than planned corridor frameworks. [1]

Regional components

The RCEC is designed to connect four distinct regional nodes, each with specific economic focuses:

North Sumatra centers on the Sei Mangkei Special Economic Zone, targeting palm oil processing and petrochemical products. However, as of 2022, the SEZ only reached about 22% of normal operation capacity, with most spaces occupied by Indonesian state-owned enterprises rather than Chinese companies. [1]

North Kalimantan focuses on green industrial parks and the Kayan Hydropower Project. The hydropower initiative, initially developed by Sinohydro and later involving PowerChina, faced commercial viability issues leading to Chinese withdrawal in 2022. Japan's Sumitomo Group briefly replaced Chinese involvement but also terminated its relationship with project developers. [1]

North Sulawesi emphasizes the Bitung Special Economic Zone and tourism development. Chinese tourism investments have been characterized by monopolistic practices, including zero-dollar package tourism schemes that primarily benefit Chinese-operated companies and their local partners. [1]

Bali was designated for new tourism zones, though coal-fired power plants have been the primary materialized projects, including the 380 MW Celukan Bawang plant developed by China Huadian Group. [1]

References

  1. 1 2 3 4 5 6 7 8 Wijaya, Trissia; Camba, Alvin (2025). "The (Geo)politics of the Belt and Road Initiative: economic corridors in Indonesia and the Philippines". Eurasian Geography and Economics. doi:10.1080/15387216.2025.2534559.
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