Buoyed by the business facilitation measures under the newly-established free trade agreement between China and its neighboring 10 Southeast Asia economies, investment by China's large companies in the region is on the upswing.

Among all the 10 Southeast Asia nations, Indonesia, the region's largest domestic market with 240 million people, is set to be the major "gold rush" destination for Chinese businesses striving for overseas expansion.

"Indonesia's investment environment is improving as China's participation in the country's infrastructure and energy sectors grows amid increasing mutual understanding between the two nations," said Zhu Deliang, deputy chief engineer of Shanghai Electric Power Generation Group.

Shanghai Electric, the country's top power equipment maker, tapped into the Indonesia market as early as 2007 with a coal-fired power plant worth $891 million with three generating units providing a capacity of 350 megawatts each in Indonesia's beach-resort town of Pelabuhan Ratu.

"The plant is expected to go into operation in 2011. Following the successful maiden investment in the country, we're now looking at more projects in the region," said Zhu.

China has emerged as Indonesia's third largest trade partner. During the first nine months of this year, China's trade volume with Indonesia was up 56 percent at $30.4 billion, according to statistics from China Customs. In 2009, China's direct investment in Indonesia grew 29 percent.

This year also marks the 60th anniversary of diplomacy between China and Indonesia.

"China is encouraging domestic firms to invest in Indonesia by actively participating in electricity, coal and gas-oil projects," said Zhang Guobao, vice-minister of the National Development and Reform Commission (NDRC).

With capital and policy support from the central government, China's State-owned firms have spearheaded investment in resources-rich Indonesia.

After pumping billions of US dollars into Indonesia, big Chinese firms, including China Huadian Corporation, Sinopec and CNOOC, are looking for more investment on the back of preferential polices to facilitate business between China and the Association of Southeast Asian Nations (ASEAN) members, of which Indonesia is one.

"Indonesia has become one of Chinese enterprises' main target investment countries overseas," said Wang Jinzhen, vice-chairman of the China Council for the Promotion of International Trade.