Other BriefingsThe Future of Chinese Investment in Indonesia
Indonesia closed 2024 with investment realization of 1,714.2 trillion rupiah (US$95.2 billion), up 20.8 percent year on year, with 900.2 trillion rupiah (US$50.0 billion) from foreign direct investment. In the first quarter of 2025, total investment reached 465.2 trillion rupiah (US$25.8 billion) and FDI reached 230.4 trillion rupiah (US$12.8 billion), with Singapore, Hong Kong, China, Malaysia, and Japan the top sources.
These flows continue to concentrate in metals processing, power, industrial parks, logistics, and transport, which are the sectors most aligned with Indonesia’s downstreaming agenda and therefore the places where incumbency is strongest, and time-to-scale is shortest.
The next wave of opportunities for Chinese investors in Indonesia
Nickel, EV Supply chains, and the industrial-park playbook
Indonesia now dominates global refined nickel supply, providing about 65 percent in 2024, with Chinese companies controlling roughly three-quarters of domestic refining capacity. That level of incumbency sets technology standards, shapes ESG practices, and determines pricing power in the EV battery chain. The most visible examples are Morowali (IMIP) and Weda Bay (IWIP) industrial parks, which integrate smelters, captive power, chemicals, logistics, and housing to compress time-to-market.
These estates deliver cost advantages but face heightened scrutiny after safety incidents and environmental controversies.
For Chinese investors, the opportunity lies in maintaining leadership in nickel refining while moving downstream into precursors, cathodes, and recycling, where compliance with traceability requirements will determine access to US and EU markets.
Digital economy and data infrastructure
Indonesia’s digital economy reached US$90 billion in 2024 and could rise to US$200–360 billion by 2030. Digital payments are exploding, with Rp262 trillion in QRIS transactions recorded in Q1 2025 alone.
Jakarta’s data-center load hit 659 MW in 2025, and Batam is emerging as a regional hub as Singapore caps new capacity.
Chinese firms can capture this growth by developing AI-ready campuses, investing in edge computing, and integrating EPC, financing, and cloud services to dominate the compute backbone of Southeast Asia.
Healthcare and life sciences
Indonesia’s BPJS program covers 278.1 million people, nearly the entire population, with healthcare spending still only 3.7 percent of GDP. Nearly 3,000 hospitals and 10,000 primary health centers form the base of the system, but facilities are stretched. Chinese investors have a pathway into hospital PPPs, diagnostics, and pharmaceutical manufacturing inside SEZs. Growth in clinical-trial ecosystems also allows biotech partnerships to use Indonesia as a regional testbed.
Renewable energy and power transition
With 42.6 GW of renewables and 10.3 GW of storage mandated in the RUPTL, Indonesia is the region’s largest green-energy frontier. Opportunities for Chinese firms include utility-scale solar with integrated storage, geothermal drilling, and transmission partnerships with PLN. Meeting TKDN thresholds and embedding ESG early are not optional—they determine whether projects clear bankability tests.
Infrastructure and smart cities
The Jakarta–Bandung high-speed rail cost US$7.3 billion and now anchors plans to extend service to Surabaya. In Nusantara, Chinese firms submitted 36 letters of interest by May 2025, with nearly Rp70 trillion already invested. Opportunities go beyond roads and rails. Chinese companies can lead in smart utilities, green construction, logistics hubs, and digital command centers, shaping Nusantara into Southeast Asia’s first purpose-built smart city.
Looking toward 2030
Indonesia is entering a phase where downstream industry, infrastructure, and digital systems will define its position in Southeast Asia. For Chinese investors, the most durable opportunities are likely to be in three areas: industrial parks that anchor heavy industry, the build-out of renewable energy and digital infrastructure, and the gradual expansion of healthcare and urban services. Each of these sectors is being shaped now through licensing reforms, fiscal incentives, and public–private partnerships.
The pace of regulatory change is equally important. Indonesia’s Positive Investment List has reshaped ownership rules, while the risk-based licensing system is altering project timelines. Local-content requirements in power and infrastructure are being updated, and the new VAT rate of 12 percent is already in effect. These changes mean that regulatory awareness and careful structuring will influence outcomes as much as capital or technology.
By 2030, much of the investment landscape will already be consolidated. Investors who engage early with these evolving frameworks will be better placed to secure stable positions in a market that is locking in its long-term projects and concessions.
This article first appeared on ASEAN Briefing, our sister platform.
