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View all search resultsUS-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.
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People walk near the DayOne data center in Nongsa Digital Park (NDP) in Batam city, Riau Islands, on July 20. Batam has attracted at least 16 new data centers in various stages, despite limited clean water and electricity infrastructure . (JP/Fadli)
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s United States-China trade tensions and Washington’s sweeping new tariffs disrupt global supply chains, Indonesia has a window to position itself as a new destination for foreign investment in manufacturing and industry.
Indonesia has seen foreign direct investment rise amid the “China plus one” shift as companies diversify beyond China to other countries as an alternative production base, giving Jakarta fresh momentum in developing domestic industry.
“We are benefiting from the current geopolitical situation, particularly in capital-intensive industries and data centers,” Deputy Industry Minister Faisol Riza told The Jakarta Post on Aug. 13. “Many contracts are being signed even before new facilities are built.”
Indonesia has already become a relocation destination for Chinese companies for some time, Faisol said, describing the recent trend a direct benefit of the US-China trade war. The influx fit with the country’s downstream and industrialization push, he added.
Besides manufacturing, Chinese companies showed interest in dimethyl ether (DME) gasification and waste-to-energy projects, both projects managed by state asset fund Danantara. Chinese firms are participating in at least six of those projects.
Investment interest from India was also growing as they were seeking greater access to Indonesia’s domestic market. Similar with China, Indian firms also eyed Indonesia as an export base.
Mainland Chinese investment reached US$3.9 billion in the first half this year, more than double the $1.8 billion recorded in the same period last year, while investment from Hong Kong surged from $2.3 billion to $7.6 billion, according to Investment Coordinating Board (BKPM) data.
