China remains one of Indonesia’s most powerful economic partners in 2025, shaping the nation’s industrial growth, infrastructure expansion, and green energy transition. With over USD 5.4 billion invested in just the first three quarters of 2025, China ranks among the top three sources of foreign direct investment (FDI) in Indonesia, behind Singapore and Hong Kong. Together, Greater China contributes nearly USD 12.7 billion, confirming Indonesia’s pivotal role in Beijing’s regional investment strategy.
At InvestinAsia, we have observed how this momentum creates opportunities and valuable lessons for global investors like you, especially those seeking sustainable growth in one of Southeast Asia’s fastest-growing markets.
China’s Major Investment Sectors in Indonesia
Chinese investments are deeply embedded across Indonesia’s industrial ecosystem. Major projects in nickel refining, electric vehicle (EV) manufacturing, renewable energy, and infrastructure have redefined Indonesia’s global competitiveness.
Nickel and Battery Supply Chain
China controls roughly 75% of Indonesia’s nickel refining capacity, anchoring the world’s largest EV battery ecosystem. Projects such as the Karawang Battery Plant, a USD 6 billion joint venture involving CATL, Antam, and Indonesia Battery Corporation, are projected to generate 35,000 jobs and add USD 42 billion annually to GDP. This collaboration highlights Indonesia’s vital role in the green industrial revolution.
Also read: Nickel Industry in Indonesia: Opportunities, Challenges, and Future Outlook
Automotive and EV Manufacturing
Automotive giants including BYD, Chery, Wuling, and Neta have transformed Indonesia into their regional EV hub. BYD’s USD 1 billion Subang Smartpolitan facility will double production capacity to 300,000 vehicles per year by 2026. The rapid surge of Chinese EV investment demonstrates strong confidence in Indonesia’s future as Southeast Asia’s center for electrification.
Also read: Automotive Industry in Indonesia: Opportunities and Outlook
Green and Renewable Energy
Chinese companies are leading Indonesia’s transition to clean energy through solar, geothermal, and hydropower projects. LONGi Green Energy and Trina Solar have established factories that produce gigawatts of photovoltaic panels each year. The Batang Toru Hydropower Dam (510 MW) also showcases successful collaboration between China and Indonesia in sustainable energy development.
Also read: Investment Incentives for Green Tech and Renewable Energy Projects in Indonesia
Infrastructure and Nusantara Development
China’s participation in developing Indonesia’s new capital city, Nusantara, has surpassed IDR 70 trillion (USD 4.3 billion). From multi-utility tunnels to smart city networks, Chinese investors are helping to build the foundation of Indonesia’s next-generation capital. Likewise, the Jakarta–Bandung high-speed railway, the first in Southeast Asia, symbolizes the scale and ambition of bilateral cooperation, even as financial challenges persist.
Trade Relations and Economic Challenges
While investment ties continue to strengthen, trade imbalances have also widened. By mid-2025, Indonesia recorded a USD 13.2 billion trade deficit with China, largely driven by imports of machinery and vehicles. This highlights the importance of increasing value-added exports and fostering more balanced industrial collaboration.
Despite this, China remains Indonesia’s largest trading partner, accounting for 23.8% of exports and 40% of imports. For foreign investors, this signifies deep cross-border integration and vast opportunities within Indonesia’s evolving supply chains.
Also read: 10 Challenges of Doing Business in Indonesia
Strategic and Geopolitical Dimensions
Indonesia’s formal entry into BRICS in 2025 has reinforced its partnership with China and other emerging economies. However, it also underscores the need for balanced policies between Chinese capital inflows and Western partnerships. From an investment advisory perspective, this multipolar environment presents excellent opportunities for diversification and sustainable growth.
At the same time, geopolitical sensitivities, especially those surrounding the South China Sea, require foreign investors to remain informed and strategic. Indonesia continues to assert its sovereignty while maintaining strong economic diplomacy with all major partners.
Also read: Comparing Indonesia’s Foreign Business Entry Barriers vs. Other ASEAN Countries
Why Indonesia Remains a Prime Investment Destination
Indonesia’s investment climate remains strong, targeting IDR 1,905 trillion in total investment by the end of 2025. The government’s risk-based licensing system (OSS-RBA) and focus on green industrialization continue to make market entry easier for foreign investors.
For investors from China and beyond, opportunities can be found in downstream processing, EV infrastructure, renewable projects, and digital transformation. As the world’s fourth-most populous nation and a gateway to ASEAN markets, Indonesia offers unmatched scale and long-term growth potential.
Also read: Why Indonesia Remains an Attractive Foreign Investment Destination
Our Perspective at InvestinAsia
At InvestinAsia, we help foreign investors navigate Indonesia’s evolving investment environment, from company registration and licensing to market entry and expansion. Our experts ensure full regulatory compliance, allowing you to focus on strategy and growth rather than administrative processes.
If you are exploring opportunities in Indonesia’s expanding sectors such as energy, manufacturing, logistics, or the digital economy, our complete range of Indonesia market entry services offers the local insight and legal support you need to establish and grow successfully.
Learn more about InvestinAsia’s complete services:
- PMA registration in Indonesia (Foreign Company)
- Representative office registration in Indonesia
- Indonesia Local PT PMDN Set Up
- Indonesian Virtual office setup
- Business registration number in Indonesia
- Business Licenses in Indonesia
- Trademark Registration in Indonesia
- Franchise License in Indonesia
- Indonesia Visa and Stay Permits Application
- Indonesia Tax Consultant and Compliance
If you are interested in starting a business in Indonesia without hassle, you can start by contacting us for FREE consultation.
In conclusion, China’s growing investment in Indonesia reflects the country’s rising importance on the global stage. Whether you represent a multinational corporation or a new market entrant, Indonesia’s inclusive investment landscape offers vast opportunities. At InvestinAsia, we are ready to help you capture them effectively and sustainably.
FAQs About China’s Investment in Indonesia
1. Why is China investing heavily in Indonesia?
China views Indonesia as a resource-rich and strategically located partner in Southeast Asia, vital for energy transition and industrial supply chains.
2. Which sectors attract the most Chinese investment?
Nickel processing, electric vehicle manufacturing, green energy, infrastructure, and the digital economy are among the top sectors.
3. What are the main challenges in China-Indonesia investment relations?
Key challenges include trade imbalance, debt sustainability, and sovereignty sensitivities in strategic sectors.
4. How does Indonesia benefit from Chinese investment?
Chinese capital drives job creation, technology transfer, industrial downstreaming, and infrastructure modernization.
5. What should foreign investors learn from China’s approach?
Success in Indonesia requires early market positioning, strong partnerships, and a deep understanding of local regulations.
