JAKARTA — Indonesia recorded a notable shift in its foreign investment landscape during the second quarter of 2026, with Hong Kong overtaking Singapore as the country’s largest immediate source of foreign investment.

The change marked the first time in ten years that Singapore did not occupy the top position for a quarterly period.

Investment and Downstream Industry Minister and Investment Coordinating Board Chairman Rosan Roeslani attributed the shift largely to more aggressive investment by Chinese businesses using Hong Kong as their investment channel into Indonesia.

Investment registered from Hong Kong reached US$5 billion between April and June 2026. Singapore followed with US$4.2 billion, while mainland China ranked third with US$1.7 billion. Japan contributed US$900 million and Malaysia US$700 million.

Indonesia’s Top Five Investment Sources in Q2 2026

Together, the five sources accounted for approximately 79.6% of Indonesia’s foreign investment during the quarter. South Korea and the Netherlands were among the other major sources outside the top five.

Registered Origin May Differ From the Ultimate Investor

Hong Kong’s rise to the top of the ranking does not necessarily mean that all of the capital originated from Hong Kong-based owners.

According to Rosan, much of the investment was ultimately linked to China, with companies using Hong Kong as a financial or corporate hub before deploying capital into Indonesian projects. A significant portion of the investment was directed toward downstream industries associated with mineral processing.

This distinction is important when interpreting foreign investment statistics. Official data generally identify the jurisdiction from which an investment is directly transferred or registered. That jurisdiction may not always be the home country of the company’s ultimate shareholder.

A similar pattern can occur with investment recorded from Singapore or Malaysia. International companies frequently establish regional entities in major Asian financial and business centers before investing in other markets.

The quarterly ranking therefore shows the immediate route used by the capital rather than, in every case, the investor’s ultimate country of origin.

Singapore Retains the First-Half Lead

Although Hong Kong led the ranking in the second quarter, Singapore remained Indonesia’s largest investment source for the entire first half of 2026.

Investment registered from Singapore totaled US$8.8 billion between January and June. Hong Kong ranked second with US$7.6 billion, leaving a gap of US$1.2 billion.

Mainland China contributed US$3.9 billion, followed by Japan with US$1.9 billion and the United States with US$1.7 billion.

The figures show that Hong Kong’s strong second-quarter performance was not sufficient to overtake Singapore on a six-month basis. Nevertheless, the narrowing gap points to the growing importance of Hong Kong as an investment gateway for projects in Indonesia.

Quarterly Investment Reaches Rp511.8 Trillion

Indonesia attracted Rp511.8 trillion in total investment during the second quarter of 2026. The projects generated 742,293 jobs, representing a 5.1% increase under the government’s year-on-year comparison.

Domestic and foreign investment made nearly equal contributions. Domestic investment accounted for 49.6% of the total, while foreign direct investment represented 50.4%.

Basic metals, metal products excluding machinery, and equipment formed the largest investment category, attracting Rp81 trillion or 15.8% of the quarterly total.

Transportation, warehousing, and telecommunications received Rp57.3 trillion, followed by mining at Rp53.1 trillion. Trade and repair activities attracted Rp40.8 trillion.

The prominence of metals and mining is consistent with the government’s assessment that much of the China-linked capital entering through Hong Kong was associated with Indonesia’s mineral-downstreaming program.

First-Half Investment Passes Rp1 Quadrillion

Indonesia’s cumulative investment realization reached Rp1,010.6 trillion during the first six months of 2026, increasing 7.2% from the same period a year earlier.

The figure represented 49.5% of the government’s full-year investment target of Rp2,041.3 trillion. Foreign direct investment reached Rp507.6 trillion, while domestic investment totaled Rp502.9 trillion.

Projects implemented during the period generated nearly 1.45 million jobs.

Hong Kong’s quarterly rise illustrates how regional financial centers influence the direction and classification of investment flows into Southeast Asia.

Singapore remains Indonesia’s leading investment hub on a cumulative basis, but Hong Kong is becoming an increasingly significant gateway for China-linked capital, particularly in mineral processing and other downstream industries.

For Indonesia, the longer-term test will extend beyond attracting large headline commitments. The economic effect will also depend on how successfully those investments create productive capacity, transfer technology, involve domestic suppliers, generate sustainable employment, and produce broader benefits for the regions hosting the projects.