Jakarta, Indonesia. Photo: iStock
Jakarta, Indonesia. Photo: iStock

Hong Kong beat the United States in terms of foreign direct investment in Indonesia since last year.

Hong Kong investors have been the fourth largest foreign nationality putting money into Indonesia since 2016, behind Singapore, Japan and China with US$1 billion in the first half of last year, according to data from Indonesia’s Investment Coordinating Board.

Hong Kong entities climbed to No.4 in 2016 when they invested $2.2 billion in Indonesia and helped spur a 5.8% jump in Indonesian foreign investment in the first half of last year to 429 trillion rupiah ($30 billion).

Tri Tharyat, the Indonesian Consul General in Hong Kong, said there has been increasing interest in investing in Indonesia – and he has taken three delegations from Hong Kong to Jakarta this year.

“Indonesia has a big population with a middle class rising to 60% of the population,” said Tharyat. Power plants and waste management were two hot areas for Hong Kong investors, he said.

More small-to-medium enterprises were also exploring opportunities as part of the Belt and Road Initiative that includes Indonesia. President Joko Widodo had met President Xi Jinping five times in the last three and a half years, he said.

Tharyat expected more business interest under the Widodo regime because of the steady political climate. Last year Indonesia and Switzerland rated top as countries with the most trusted governments in the Organization for Economic Cooperation and Development’s “Government at a Glance 2017” report.

Some trading conglomerates in Hong Kong also have a big presence in Indonesia. Indofood, owned by First Pacific, and Astra International, owned by Jardine Matheson, are leaders in the food and car sectors, for example. Both have stocks on the Jakarta Stock Exchange Composite Index.

Tycoon Li Ka-shing’s CK Hutchison has run the mobile business PT Hutchison 3 Indonesia since 2007. It had a national coverage serving 63.75 million subscribers by the end of last year.

And Hutchison Port Holdings, which runs two terminals in Jakarta and Koja, is interested in expanding to a third port.

Swire Properties has also had a representative office in Jakarta since 2013.

Jakarta and Bali are the two centers best-known among Hong Kongers – the former for business and the latter for leisure. Jakarta is booming, but Bali is recovering from a volcanic eruption last November.

The number of Chinese tourists dropped 90% in November but has recovered to a more normal level this year, according to Ricky Tse, president and chief executive officer of United Holidays Co, which owns a hotel called Bali Relaxing Resort.

Tse said more tourists were expected in August, led by the Chinese, who have displaced the Singaporeans and Australians as the top visitors in Indonesia in terms of numbers. Over 20 million tourists are expected to visit Indonesia by 2020.

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