Asian AngleIndonesia’s nickel rule changes are spooking Chinese investors
A leaked grievance letter reveals how Jakarta’s resource nationalism risks driving essential Chinese capital away
Collectively, Chinese firms argued these measures had significantly increased operational costs and undermined investment certainty in Indonesia’s downstream nickel sectors.
The nickel industry has arguably become the economic backbone of modern Indonesia-China relations. Over the past decade, Chinese firms have invested more than US$65 billion in smelters, industrial estates and EV battery material processing facilities, particularly in Sulawesi and North Maluku.
Indonesia’s downstreaming industrial strategy, enforced through a raw ore export ban and domestic processing mandate, succeeded primarily because Chinese capital and technology were willing to take the risks associated with such industrial policy. Regulatory coercion via export bans, cheap coal-based energy and weak environmental enforcement together created the conditions for Chinese capital expansion.