Recently, Chinese investors have shown a trend of flocking to Indonesia, a phenomenon driven by multiple factors:
Investment Scale and Status: In the first half of 2025, direct investment from mainland China to Indonesia reached $3.6 billion, a year-on-year decrease of 8%, but still firmly ranked third among sources of foreign investment in Indonesia, behind only Singapore and Hong Kong.
Investment Fields: China's investment in Indonesia is expanding from traditional mineral processing to more diversified areas.
Key Factors
Policy Support: The Indonesian government has introduced a series of policies to attract foreign investment, such as focusing on the development of downstream industries, in which Chinese investment accounts for 12%, with a total scale of 280.8 trillion Indonesian rupiah. Additionally, the “Golden Visa” introduced by the Indonesian government has also attracted some Chinese investors.
Market Potential: Indonesia has a population of over 270 million, making it the 7th largest economy in the world, and its large population base provides a vast consumer market for Chinese investors.
Resource Abundance: Indonesia is rich in natural resources, such as nickel, copper, and coal, which are highly attractive to relevant Chinese industries. For example, Chinese enterprises have made substantial investments in Indonesia's nickel smelting industry, with Tsingshan Holding and Jiangsu Delong Nickel Industry jointly controlling over 70% of Indonesia's nickel refining capacity.
Avoiding Tariffs: To evade the high import tariffs of over 30% imposed by the United States on Chinese products, Chinese companies choose to establish factories in Indonesia, as the tariff on similar products from Indonesia is only 19%.
Investment Impact: The massive influx of Chinese enterprises has driven up prices for industrial land and warehouses in Indonesia, rising by 15% to 25% year-on-year in the first quarter of 2025, marking the largest increase in 20 years.
