A leaked grievance letter reveals how Jakarta’s resource nationalism risks driving essential Chinese capital away
4-MIN READ4-MIN ListenSiwage Dharma NegaraandLeo SuryadinataPublished: 3:00pm, 13 Jun 2026Chinese investors in Indonesia’s nickel industry recently sent a formal protest letter to President Prabowo Subianto. The message reflects their concerns over Indonesia’s political and economic direction, and the long-term trajectory of Chinese investment and Indonesia’s industrialisation programme will hinge on how Indonesia resolves them.The letter, submitted by the China Chamber of Commerce in Indonesia (CCCI), complained about a series of government policies, including proposed royalty increases, stricter foreign exchange retention rules, sharp reductions in nickel mining quotas and what investors described as increasingly indiscriminate law enforcement.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.
