Chinese Firms Rush to Indonesia to Dodge US Tariffs, Eye Vast Consumer Market

JAKARTA – Chinese companies are flocking to Indonesia to sidestep hefty US import tariffs, with demand for industrial land and warehouses soaring, Reuters reported. Indonesia’s 19% US tariff rate, lower than China’s 30%+, combined with its vast consumer market, is drawing manufacturers from toys to electric vehicles.

Industrial parks, particularly in West Java near the Patimban deep-sea port, have seen a surge in inquiries since last month’s US-Indonesia trade deal. Gao Xiaoyu, founder of PT Yard Zeal Indonesia, said real estate prices have jumped 15–25% year-on-year, the fastest in two decades.

Foreign investment from China and Hong Kong hit US$8.2 billion in the first half of 2025, up 6.5% year-on-year. While Indonesia offers high profit margins and a young talent pool, challenges remain, including bureaucratic hurdles and incomplete supply chains. Analysts say the country’s appeal lies not just in supply chain diversification, but also in its 270 million-strong domestic market.