Muddy yet clear-cut: How Chinese investors are turning jungle into Indonesia’s new capital

AdvertisementChina’s private sectorEconomyChina EconomyMuddy yet clear-cut: How Chinese investors are turning jungle into Indonesia’s new capital

Chinese construction firms keen to cement trade ties with Jakarta through multimillion dollar projects to build a brand new centre of power

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Ralph Jenningsin Ibu Kota Nusantara, IndonesiaPublished: 9:00am, 26 Apr 2026

After an hour’s drive through the jungle of Borneo, you reach more jungle. Your rental van from the Balikpapan city airport shakes precariously, navigating a partial bridge washout. A roadside sign admonishes against poaching the endangered sun bears.

By hour three you’ve arrived at Indonesia’s new capital, which is due to start taking over from gridlocked, polluted and seaward-sinking Jakarta in 2028.Advertisement

Welcome to Ibu Kota Nusantara, known locally as just Nusantara or IKN. Eventually, if all goes according to plan, it will be a brand new city housing the 287 million-person archipelago’s seat of government.

For now, it is still a jungle. But investors from China are clearing away a lot of that land to build the capital. Without them, the flora and fauna would keep a firm grip on the area.

Indonesian government figures show that Chinese investors had spent US$29 million during 2025 to develop pieces of the capital and committed US$3.08 billion more.The Chinese investors, a pillar for the new capital’s construction during a budget cut year, hope to cement long-term relations in the massive Southeast Asian market and most locals are keen to see what they can do.Specifically, Shenzhen-based investment group Delonix, the first Chinese firm to come aboard at IKN, is developing a mixed-use commercial project. Chinese tech hardware giant Huawei Technologies is working with local partners on “smart city” infrastructure, and Citic Construction is building homes.Advertisement

Chinese firms are also taking part in road and tunnel construction work worth 27 trillion rupiah (US$1.57 billion) and mass transit projects for 28 trillion rupiah, according to data compiled by Asia-Pacific Economics.

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