Chinese Investments Surge in Indonesia Amid Tariff Pressures

TLDR

• Chinese investments reached $8.2 billion in the first half of 2025.
• Indonesia’s government supports foreign investments with liberal policies.
• 49 million users expected for digital assets in Indonesia by 2026.

Chinese investors in 2025 have heightened their interest in Indonesia, funneling a significant amount of capital into the country. This rise, marked by a 6.5% year-over-year increase, has resulted in investments amounting to $8.2 billion in the first six months of the year.

This strategic move is largely influenced by the ongoing tariff pressures from the Trump administration in the United States. Investors from mainland China and Hong Kong are shifting their focus as they seek alternatives to mitigate these pressures.

Key Players in Indonesia’s Investment Boom

The influx of investments into Indonesia is spearheaded by Chinese and Hong Kong investors, comprising state-linked and private entities. These investors are primarily targeting Indonesia’s industrial, tech, and real estate sectors.

Indonesia’s government, led by President Prabowo Subianto, has actively supported these investments. The administration highlights economic partnerships and liberal policies that have helped to accommodate this capital shift. The Nusantara Capital City Authority (OIKN) is also playing a crucial role by organizing large-scale projects that benefit from these funding sources.

Benefits to Indonesia’s Industrial Landscape

As of August 2025, Indonesia reported a total realized investment of approximately Rp942.9 trillion (USD $63 billion), with nearly half of the annual target achieved by mid-year. China and Hong Kong contributed over $8 billion within this period.

Investment targets include basic metals, mining, tech, telecommunications, industrial estates, and services sectors. The new Nusantara capital project alone has attracted $4 billion from private investors, with forecasts predicting the need for $32 billion in private capital investment overall.

Potential Impact on Cryptocurrency and DeFi

Chinese capital seeking new investment opportunities could have implications for Indonesian cryptocurrency infrastructure and decentralized finance (DeFi) projects. Nevertheless, no primary sources confirm specific allocations to Ethereum (ETH), Bitcoin (BTC), or other altcoins in this wave of investments as of August 2025.

While the U.S. introduces new regulatory policies leading to increased capital flow eastward, correlated Indonesian DeFi and exchange tokens might generate growth. It’s anticipated that the user base in Indonesia for digital assets could reach nearly 49 million by 2026.

Past Trends and Potential Outcomes

Historically, spikes in foreign direct investment (FDI) from China to Southeast Asia during trade disputes have bolstered real asset tokenization and DeFi activity in the region. From 2018 to 2020, when U.S.-China trade relationships tightened, capital from China moved towards Vietnam, Malaysia, and Indonesia.

In those instances, Layer 1 and DeFi project tokens in recipient nations saw growth in Total Value Locked (TVL) metrics, partly driven by media reports and on-chain data.

Cryptocurrency Tokens and Regulatory Environment

Although no specific cryptocurrencies are directly highlighted in government reports or official statements, assets like Ethereum (ETH), Bitcoin (BTC), Solana, and Cardano are included in recent U.S. digital asset reserve policies. These assets could be indirectly affected by increased global investment shifts.

Indonesia’s favorable climate for investments extends to the integration of tokenized finance, albeit with stringent wallet-to-wallet transfer rules. Meanwhile, the Trump administration in the U.S. has temporarily halted enforcement actions against major crypto exchanges like Coinbase.