How China’s Dominance Harms Indonesia: Exploitation, Pollution, and Lost Sovereignty

The Takeover of Key Industries

First, China’s dominance harms Indonesia most visibly in critical sectors such as mining and resource processing. In fact, Chinese companies now control over 75% of Indonesia’s nickel refining capacity. As a result, local firms are left with little influence or share in their own country’s wealth. Consequently, this overwhelming foreign control limits Indonesia’s ability to set prices, manage supply chains, and maximize benefits from its natural resources. Therefore, Indonesia is gradually losing economic independence while, at the same time, Chinese firms and investors reap the rewards.

Exploitation and Poor Labor Conditions

Next, the impact of China’s dominance harms Indonesia’s workforce through exploitation and substandard labor conditions. For example, in nickel processing hubs, both Indonesian and Chinese workers face dangerous environments. Specifically, respiratory illnesses, memory loss, and rapid heartbeat are common due to poor air quality and unsafe practices. Furthermore, Chinese-backed projects often ignore workers’ rights, leading to dozens of fatalities and hundreds of injuries in recent years. Moreover, many laborers—especially those from vulnerable backgrounds—lack proper protection or avenues for justice. Thus, the situation remains dire for countless workers.

Environmental Destruction and Pollution

Additionally, China’s dominance harms Indonesia’s environment in devastating ways. For instance, nickel smelters and mines, often powered by coal-fired plants, have contributed to massive deforestation and severe air and water pollution. In North Morowali alone, over 8,700 hectares of rainforest have been cleared, threatening local ecosystems and Indigenous communities. Similarly, industrial complexes built near primary forests have displaced Indigenous peoples and destroyed vital ecological services. Consequently, these actions leave behind long-term damage that affects the entire nation.

Loss of Economic Sovereignty

Moreover, China’s dominance harms Indonesia’s ability to control its own economic future. Since Chinese firms hold most of the country’s nickel refining capacity, Indonesia has lost significant economic sovereignty. In fact, Chinese companies—many with close ties to the Chinese government—dictate market terms and restrict Indonesia’s ability to develop independent supply chains. As a result, this foreign influence exposes Indonesia to geopolitical pressure and reduces its bargaining power on the world stage.

How China’s Dominance Harms: Trade Tensions and Harm to Local Industry

Furthermore, China’s dominance harms Indonesia’s domestic industries through unfair competition and market flooding. Specifically, the influx of cheap, often illegal Chinese goods—such as ceramics and textiles—has led to job losses and factory closures among Indonesian businesses. In response, the Indonesian government has imposed tariffs and destroyed millions of illegal imports. However, these measures have not fully addressed the imbalance or restored local industry.

Key Takeaways: Addressing the Harm Caused by China’s Dominance

Ultimately, China’s dominance harms Indonesia through exploitation, pollution, and loss of sovereignty. The evidence is clear: unless Indonesia takes stronger action to limit foreign control and protect its people and resources, the negative impacts will only worsen. Therefore, true reform requires strict regulation, transparency, and a commitment to prioritize Indonesia’s interests over foreign profit.