China’s construction for Indonesia’s new capital Nusantara to lead growing overseas city-building portfolio

China is positioning itself to become one of the top foreign investors in Nusantara, the planned new capital of Indonesia that is being built from scratch over the next 20 years in the middle of forests and palm tree farms.

The investment is expected to become the stand-out showpiece in a growing body of work building smart cities and other landmark urban zones in other countries, analysts said.

The projects in turn would help China connect with friendly nations to facilitate trade, they added, giving Chinese construction firms a chance to prove themselves abroad.

“It’s fair to say that China has the strongest squad of engineers and constructors, who have benefited from the country’s building boom since the mid-2000s,” said Xu Tianchen, a senior China-based economist with the Economist Intelligence Unit.

“China is also experienced in providing full life cycle solutions, from financing to construction and maintenance, which make life easier for host countries.”

Beijing-based state-owned builder Citic Construction has expressed interest in developing 60 residential towers in Nusantara, which is set to replace flood-prone Jakarta as the national capital.

The move had been delayed due to the coronavirus pandemic, but government offices may be relocated this year as officials seek to reduce the burden on Jakarta.

“I’m not surprised that China will invest a lot in Indonesia, including [Nusantara], because the Indonesian minister of investment has said that doing business with China is easy and they are not fussy about asking for various requirements like other countries,” said Nukila Evanty, a Jakarta-based member of the Asia Centre research institute’s ­advisory board.

Building cities for other countries also naturally follows