The sustainability of the Indonesian Capital City (IKN) project was a big question before the 2024 presidential general election. However, the election of the candidate pair (paslon) Prabowo Subianto-Gibran Rakabuming Raka made the project provide certainty for IKN. It is hoped that this certainty will attract more interest from foreign investors, including from China. As is known, in the campaign and debate, Prabowo-Gibran expressed their intentions and plans to continue the IKN project initiated by President Joko Widodo.
Several countries have expressed interest in participating in the construction of a new capital city that represents the future of Indonesia’s central government. Among them are two neighboring countries, Malaysia and Singapore, and there are two large countries, namely China and the United States, which have also expressed their interest in participating in the development of IKN. The two countries’ commitment to investing is increasingly serious. Representatives from these countries are actively involved in meetings with local officials to further strengthen their commitment to investing in IKN.
Quoted from the South China Morning Post, China is positioning itself to become one of the largest foreign investors in IKN, Indonesia’s new capital city plan which will be built from scratch over the next 20 years amidst forests and palm tree plantations. This investment is expected to become a prominent feature in efforts to build smart cities and other important urban zones in other countries.
These projects will in turn help China connect with friendly countries to facilitate trade, thereby giving Chinese construction companies the opportunity to prove themselves abroad.
Beijing based state-owned construction company Citic Construction, has expressed interest in developing 60 residential towers in IKN, which would replace flood-prone Jakarta as the country’s capital. The move was delayed due to the coronavirus pandemic, but government offices may be relocated this year as officials seek to reduce the burden on Jakarta.
China will continue to invest in Indonesia, including IKN, as the goal of the Belt and Road Initiative (BRI). Beijing’s flagship Belt and Road Initiative (BRI) has given birth to Chinese-funded infrastructure projects in many countries, including ports, highways and power plants. Smart city construction, a term that usually refers to technology-aided management of traffic and urban resources, advances China’s goal of increasing “connectivity”, especially in countries near its borders such as those in Southeast Asia.
A number of Chinese analysts and economists are optimistic that China will enter the IKN project. This step was taken to expand China’s portfolio in Asian countries. China has also been heavily involved in building new cities in Asian countries so building IKN will be the next goal. Xu Tianchen, senior economist with the Economist Intelligence Unit, said Chinese construction companies are eager to prove themselves overseas. IKN is an interesting project.
“It can be said that China has a squad of technical and building experts that has developed rapidly since the 2000s. China also has an experienced team in providing development solutions from financing to maintenance.” Xu said, quoted from the South China Morning Post.
“Chinese construction companies are now very competitive in terms of skill capacity,” said Zha Daojiong, professor of international relations at Peking University.
Zhao Xijun, a finance professor from Renmin University in Beijing, explained that for China, Indonesia is the biggest partner in Southeast Asia. China and Indonesia have also collaborated a lot, from building high-speed trains to toll roads. According to him, the Jakarta-Bandung high-speed train is an example of China’s success that could be a model. However, he warned that China’s economic slowdown could become an obstacle to Chinese investment in IKN.
March 26, 2024, CNBC Indonesia
(https://www.cnbcindonesia.com/research/20240326113107-128-525483/analis-china-yakin-xi-jinping-serius-investasi-di-ikn)