US-China trade war gives Indonesia shot at boosting investment
Combined investment from mainland China and Hong Kong reached US$11.5 billion in H1 2026, nearly three times the $4.1 billion recorded a year earlier.
The US-China trade war has presented Indonesia with an opportunity to boost investment in manufacturing and industry. Mainland China and Hong Kong combined invested $11.5 billion in the first half of 2026, nearly tripling the $4.1 billion invested the previous year. This surge in investment comes as the US-China trade tensions disrupt global supply chains, prompting companies to diversify production bases beyond China.
Indonesia has capitalized on this "China plus one" shift, with Deputy Industry Minister Faisol Riza noting that many contracts are being signed even before new facilities are built. The country has become a relocation destination for Chinese companies, benefiting from the geopolitical situation, particularly in capital-intensive industries and data centers.
Chinese firms have shown interest in projects such as dimethyl ether (DME) gasification and waste-to-energy, managed by state asset fund Danantara, and are participating in at least six of these initiatives. Additionally, Indian firms are increasing their investment in Indonesia as they seek greater access to the domestic market.
Mainland Chinese investment in the first half of 2026 reached $3.9 billion, more than double the $1.8 billion recorded in the same period last year, while Hong Kong investment surged from $2.3 billion to $7.6 billion.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
