Chinese companies are rushing to expand into Indonesia, lured by lower US import tariffs and the promise of Southeast Asia’s largest consumer market, sparking a surge in industrial land demand and rental prices.
Reuters reported that since Washington’s 19% tariff rate on goods from Indonesia took effect, well below China’s 30% plus, local industrial parks and consultants have been inundated with inquiries.
“We have meetings from morning till night,” said Gao Xiaoyu, founder of PT Yard Zeal Indonesia, who has seen industrial real estate prices jump 15% to 25% year-on-year, the fastest rise in two decades.
Indonesia’s strategic appeal goes beyond tariffs. With a population of 280 million and household spending making up more than half its GDP, the country offers foreign investors a vast domestic market. GDP growth hit 5.12% in the second quarter, the fastest in two years, while FDI from China and Hong Kong rose 6.5% to US$8.2 billion in the first half of 2025.
Companies from electric vehicle makers to toy and textile producers are targeting West Java, home to the Patimban deep sea port, as a manufacturing hub. Some are seeking “crash programme” setups, securing land and temporary facilities for immediate use, according to Colliers International.
“The 19% level is lower than I expected…in Indonesia, it’s relatively easy to achieve profit margins of 20% to 30%,” said Zhang Chao, a Chinese motorcycle parts manufacturer.
While regulatory hurdles, infrastructure gaps and policy uncertainties remain, analysts say Indonesia’s combination of tariff advantages, manufacturing potential and consumer scale is making it the new hotspot in the regional supply chain realignment.
Source: Business Today
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<p>Time: November 2025<br /> By: WTO and International Trade Group, Legal Department – VCCI</p>
