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2d ago

Chinese Firms Eye Indonesia to Bypass U.S. Tariffs

Surging enquiries for industrial land have pushed rents 25% higher, revealing local infrastructure and regulatory limitations.

Chinese President Xi Jinping and Indonesian President Prabowo Subianto shake hands during a signing ceremony at the Great Hall of the People in Beijing, China November 9, 2024. REUTERS/Florence Lo/Pool/File Photo
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Overview

  • Chinese investment from China and Hong Kong rose 6.5% to $8.2 billion in the first half of 2025 as firms seek to reduce U.S. tariff exposure by setting up local operations in Indonesia.
  • Industrial land and warehouse prices climbed 15%–25% year-on-year in the first quarter of 2025 following a spike in enquiries after the U.S.-Indonesia trade deal.
  • Land consultants report frantic demand for ready-to-use plots and temporary facilities, with investors targeting major hubs in West Java and near Patimban port.
  • Companies are drawn by Indonesia’s 19% U.S. tariff rate, young workforce and vast consumer market but face bureaucratic red tape and incomplete supply chains.
  • Indonesian officials anticipate further FDI growth in the second half of 2025 as Jakarta pursues policy reforms to ease operational bottlenecks.