China's Digital Investments in Indonesia Seen as Both Opportunity and Challenge

Rising Chinese investments in Indonesia’s digital technology sector are seen as both an economic opportunity and a challenge to national digital independence. The government is urged to strengthen regulations and cybersecurity capabilities to avoid reliance on a single country in digital infrastructure development.

Johanes Herlijanto, a representative of the Indonesian Sinology Forum, said China’s dominance in digital investments can accelerate Indonesia’s digital transformation but also poses risks to national digital sovereignty. ‘The government needs to increase supply chain diversification and avoid critical infrastructure being controlled by a single vendor or country,’ he said. He also encouraged the government to expand technology cooperation with other countries such as Japan, South Korea, and European nations. Additionally, foreign vendors must comply with Indonesian regulations, including the Personal Data Protection Law (UU PDP), data localization requirements for strategic sectors, and transparent security audits.

Professor Teddy Mantoro, a Computer Science expert at Nusa Putra University, said Indonesia holds a strategic position in China’s digital expansion across Southeast Asia. He noted Indonesia’s large digital market, from e-commerce to financial technology. He stated that the demand for digital infrastructure such as 5G networks, fibre optics, data centres, cloud services, and smart cities makes Indonesia a key market in global digital investments. ‘Economic opportunities only become strategic assets if Indonesia can transform foreign investments into domestic capacity, not just infrastructure dependency,’ Teddy said. He assessed that global geopolitical competition is now occurring in the digital technology sector, including cloud, data, artificial intelligence, and digital security. The risks Indonesia must watch for include reliance on a single vendor for critical infrastructure, strategic data shifting to foreign jurisdictions, and fragmentation of digital economic standards in ASEAN. Therefore, he believes digital diplomacy is crucial for Indonesia to benefit from technology without losing autonomy and national resilience.

Meanwhile, Gatra Priyandita, a researcher at the Australian Strategic Policy Institute (ASPI) in Canberra, highlighted China’s Digital Silk Road project in developing countries, including Southeast Asia. He said the project aims to strengthen China’s position as a global technology power through the export of digital infrastructure and technical standards. ‘Southeast Asia is a primary target for China’s digital investments, from 5G, cloud, data centres, undersea cables to smart cities,’ he said. Gatra stated these investments can accelerate regional digital transformation but warned of cybersecurity risks and China’s strategic influence in Southeast Asia. He believes Indonesia must strengthen personal data protection regulations, diversify digital infrastructure vendors, and enhance national cybersecurity capabilities.

Meanwhile, retired Brigadier General Victor P Tobing said technology control is crucial for safeguarding a nation’s interests. He stated that countries mastering technology can better control situations and defend strategic interests. Victor also warned of the importance of Indonesia preparing for technological adaptation amid rising global digital rivalries.