2023 Foreign Investment Opportunities in Indonesia

Posted by Written by Chris Devonshire-Ellis Reading Time: 4 minutes

Following where China has been spending and investing its Belt & Road Initiative capital can provide FDI clues and reveal new opportunities in recipient countries. As infrastructure builds start to yield productive user cashflows and the need for subsequent support services arises, case studies for investment potential become apparent. In this new series, we will be examining where China has spent its money and where returns on investment exist for foreign investors in piggybacking onto opportunities created by the BRI build. 

Indonesia has been a big-ticket recipient of Chinese investment for some time. As a trillion-dollar economy in its own right, the country offers opportunities in various sectors and not just infrastructure builds. These include the digital economy, healthcare, and finance, among others.  

Indonesia is also a huge, yet varied economy with a huge landmass and a significant population. The development of Indonesia in particular shows examples of how Chinese investors have been able to leverage significant million-dollar investments into multi-billion-dollar gains. An example is Alibaba’s initial US$250 million injection into Tokopedia, Indonesia’s largest e-commerce platform.  

This investment has been made in conjunction with the China-ASEAN Free Trade Agreement and the recent RCEP agreement – Indonesia is a member of both and shows how China has been combining development with free trade.   

In this new series, in which we examine China’s BRI investments into all of the ASEAN nations, we look at how its finance and development are impacting Indonesia and where the future developments lie as infrastructure developments come on stream. 


China has consolidated its position as Indonesia’s largest trading partner for nine consecutive years, with bilateral trade volume in 2021 increasing by nearly 60 percent year-on-year. China’s investment in various fields in Indonesia has also seen substantive growth. 2021 bilateral trade reached US$124.3 billion while Chinese investments in the country have exceeded US$3.2 billion making mainland China the third largest investor in Indonesia, ranked only behind Singapore (US$5 billion) and the Hong Kong SAR (US$4.3 billion).  

Major cooperation between China and Indonesia includes the development of the Jakarta-Bandung high-speed railway project and the “Two Countries Twin Parks” program. Further, both countries are signatories to the Regional Comprehensive Economic Partnership (RCEP). This reflects the highly synergized connectivity between the China-proposed Belt and Road Initiative (BRI) and Indonesia’s own national development strategy.  


The Jakarta-Bandung high-speed railway project is a US$6 billion railway line that aims to connect the capital city of Jakarta to the textile hub of Bandung, reducing travel time from 3+ hours to circa 40 minutes. China was selected by Indonesia over Japan to build Indonesia’s first fast-train rail link due to China’s superior financial structure. The project is being developed by PT Kereta Cepat Indonesia China (KCIC) a joint venture formed in October 2015 between a consortium of Indonesian state-owned companies (60%) and China Railway International (40%). Although construction began in 2016, there have been extensive COVID-19delays. In April 2022, KCIC announced that the project was 82% complete with plans to be operational by June 2023.  

In October 2019, PT Jasa Marga and PT China Communications Construction Indonesia (CCCI) agreed on the construction of a toll road linking Probolinggo and Banyuwangi in East Java province, with a total investment of US$1.6 billion and financed completely with Chinese equity.  

Other Chinese investments in Indonesia

  • In August 2017, Alibaba invested circa US$250 million in Tokopedia, an e-commerce firm based in Indonesia. In April 2022, now called GoTo, was valued at US$32 billion at its IPO.  
  • In December 2021, WeLab a (Hong Kong) fintech platform, announced a US$240 million investment in Bank Jasa Jakarta (BJJ).  
  • In April 2022, China’s first and largest online insurer ZhongAn Online P&C announced it was buying a stake in Indonesian tech-based Syariah lender Bank Aladin.  
  • In November 2021, PT Telekomunikasi Selular (Telkomsel) and ZTE deployed the first operational 5G system in Indonesia’s easternmost province Papua.  
  • Xiaomi ranked No. 1 as the leading smartphone in Indonesia in 2021.  
  • In 2018, Alibaba Cloud Indonesia built its first data center; its 2nd in 2019 and 3rd in 2021.  
  • In 2021, Tencent launched two data centers in Indonesia.  


PT Tsingshan Steel Indonesia (“Tsingshan Indonesia”) has made two significant investments in Indonesia to date: in 2017, it invested US$2.8 billion to build a high-capacity ferronickel smelter plant in Indonesia with an annual production capacity of 2 million tons of stainless steel. In 2019 Tsingshan collaborated with PT Vale Indonesia Tbk to build a US$700 million battery-grade nickel plant.  

In 2019, Zhejiang Huayou Cobalt Co agreed to cooperate with PT Aneka Tambang Tbk (“Antam”) and Shandong Xinhai to develop cathodes and ferronickel projects that will require an estimated investment of US$6-12 billion.   

In April 2022, CBL (a subsidiary of CATL) signed a tri-party framework agreement with ANTAM and PT Industri Baterai Indonesia (IBI) to cooperate on the Indonesia EV Battery Integration Project, which includes nickel mining and processing, EV battery materials, EV battery manufacturing, and battery recycling. With a joint investment of US$6 billion, the project is located in the FHT Industrial Park of East Halmahera of Indonesia’s North Maluku Province and other regions in the country.  

The Weda Bay Industrial Park is a nickel mining and industrial park complex. Tsingshan acquired 57% in 2017, and Eramet (France) owns 43%. When completed the industrial park is designed to be the first integrated Electric Vehicle battery and stainless-steel Industry complex in the world. 

Looking Ahead  

Indonesia’s growth rebounded to 3.7 percent in 2021 after a contraction of -2.7 percent in 2020. Economic growth is expected to reach 5.1 percent in 2022, accelerating into 2023 with pent-up demand as a driver. According to the World Bank, Indonesia is a middle-income country with growing income levels and is expected to rise to upper-income status by 2030. 

Indonesia Investment Intelligence  

Readers may use the ASEAN Briefing search function at the top of the homepage to find more Indonesian intelligence. Just type ‘Indonesia’ into the subject box. We also provide investment assistance and research into Indonesia, with three offices in the country assisting foreign investors. Please contact us at indonesia@dezshira.com for assistance. 


About Us

ASEAN Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in Singapore, Hanoi, Ho Chi Minh City, and Da Nang in Vietnam, Munich, and Esen in Germany, Boston, and Salt Lake City in the United States, Milan, Conegliano, and Udine in Italy, in addition to Jakarta, and Batam in Indonesia. We also have partner firms in Malaysia, Bangladesh, the Philippines, and Thailand as well as our practices in China and India. Please contact us at asia@dezshira.com or visit our website at www.dezshira.com.