Indonesia, as the largest economy in the Southeast Asian region, boasts abundant natural resources, a large population base, and a growing consumer market. As the world’s tenth-largest economy, Indonesia not only held the G20 presidency in 2022 but also demonstrated a firm commitment to global economic recovery with the theme “Recover Together, Recover Stronger.”
In recent years, economic and trade exchanges between China and Indonesia have become increasingly close, and with the upgrade of the “going global” strategy, Chinese enterprises’ investment cooperation in Indonesia has been heating up.
In 2023, China’s FDI (Foreign Direct Investment) in Indonesia reached 7.4 million US dollars, ranking second among foreign investment sources in Indonesia.
A large number of Chinese enterprises are turning their attention to this land full of opportunities.
**Data and Analysis of Chinese Enterprises’ Overseas Investment in Indonesia**
In recent years, China’s investment in Indonesia has shown a rapidly increasing trend. According to the latest data, in 2023, China’s total investment in the Asia-Pacific region approached 20 billion US dollars, an increase of 37%, with about 50% of the investment flowing into Southeast Asia, making Indonesia the largest single recipient, attracting about 7.3 billion US dollars in investment. This investment growth rate is significantly faster than the downward trend in the total foreign direct investment received by emerging Asian economies last year.
China’s investment in Indonesia has not only grown significantly in scale but also shown diversification in investment fields and industries. Investment activities are mainly concentrated in projects related to the joint construction of the “Belt and Road” initiative, especially in the energy and mining sectors, showing the green transformation characteristics of Chinese investment. In the metal and mining sector, especially in resources related to battery materials such as lithium and nickel for electric vehicles, Chinese enterprises’ investment in Indonesia reached 5.3 billion US dollars, a 130% increase compared to 2022.
Private enterprises play a leading role in China’s investment in the Asia-Pacific region, participating in energy transformation and battery material industries, highlighting China’s rise to the top of the global key mineral and renewable energy industry supply chain. In addition, Chinese enterprises’ investment in Indonesia is not limited to traditional infrastructure construction but has also expanded into emerging fields such as new energy vehicles and e-commerce.
The potential of the Indonesian market is enormous, as the world’s fourth most populous country with a large consumer market and a young population structure, attracting investors from China and other countries. Successful cases of Chinese enterprises in Indonesia, such as the leading market positions of mobile phone brands like OPPO and vivo, as well as the rapid development of new energy vehicles and battery enterprises, indicate that Indonesia has become an important destination for Chinese enterprises to go global.
**Analysis of Investment Attraction Policies in Indonesia for Chinese Investors**
1. Foreign Investment Access Regulations
Indonesia’s foreign investment access management model has shifted from a “negative list” to a “positive investment list” approach, meaning that more and more industries are open to foreign investors. The Indonesian government has also issued the “New Investment List” and “Presidential Decree No. 49,” further adjusting the scope of restrictions on foreign investment, showing a trend of further opening up of the Indonesian investment market.
2. Land System
Foreign-invested enterprises cannot obtain ownership of Indonesian land, but they can obtain building rights or usage rights. The transfer of land rights is usually carried out through contracts with landowners.
3. Tax Incentives and Investment Incentives
The Indonesian government provides financial incentives (tax exemptions, investment allowances, import duty exemptions, etc.) and non-financial incentives (simplified business licenses, provision of supporting infrastructure, and other conveniences), especially for foreign investors in priority development industries such as national strategic planning projects, capital-intensive industries, labor-intensive industries, and industries using advanced technologies.
**Industries Particularly Attractive to Chinese Investors in Indonesia**
As the largest economy in ASEAN, Indonesia has a huge market potential and abundant natural resources, attracting widespread attention from Chinese investors. The following are several industries that are particularly attractive to Chinese investors:
Infrastructure Construction: The Indonesian government promotes the rapid development of infrastructure, including transportation, energy, and communications, providing Chinese enterprises with significant investment opportunities.
Digital Economy: With the widespread adoption of digitalization in Indonesia, the internet market is expected to have considerable growth potential, especially in cloud services, mobile applications, social media, and big data analysis.
Consumer Market: Indonesia has a large consumer population and a growing middle class, providing a broad market for consumer goods and retail industries.
New Energy and High-end Manufacturing: The Indonesian government encourages the development of new energy vehicles and battery sectors, especially in high-nickelization power battery technology, where Chinese enterprises’ investment is growing rapidly.
Healthcare: Indonesia relies on imports for medical equipment, and Chinese medical equipment manufacturers have the opportunity to enter the Indonesian market to meet local medical needs.
Energy: The Indonesian government promotes renewable energy programs and is expected to increase the contribution of renewable energy in the energy structure, providing investment opportunities for Chinese energy enterprises.
E-commerce: The Indonesian e-commerce market is developing rapidly, and Chinese e-commerce companies can leverage the high penetration rate of local smartphones and the growth of digital consumers to expand their businesses.
Building Materials Industry: Benefiting from the infrastructure construction boom and rapid urbanization process, the Indonesian building materials market is in a rapid development stage, and Chinese-funded enterprises are accelerating their entry.
In summary, China’s investment in Indonesia is growing rapidly, involving a wide range of fields, showing the strategic layout of Chinese enterprises in the global supply chain and the emphasis on the Southeast Asian market. With the improvement of the investment environment and the further release of market potential, it is expected that China’s investment in Indonesia will continue to grow.
**Wanxinda Indonesia Batang Industrial Park Facilitates Going Global**
The China-Indonesia Twin Parks · Batang Industrial Park project is located in Batang Industrial City (KITB), Semarang City, Central Java, Indonesia, close to the highway and Semarang Port, with a unique geographical advantage. The factory lease terms are flexible, and the rent is reasonable. The park adopts sustainable development principles, with green development as its concept, actively introducing advanced environmental protection technologies and facilities, and is committed to creating a modern, intelligent new industrial base.
Based on the needs of Chinese small and medium-sized enterprises to go global in Indonesia, Wanxinda Batang Industrial Park provides investors with “one-stop” services, helping Chinese enterprises to quickly settle in Indonesia, saving time, money, and worry on the way to going global!
