Influx of Chinese investment pushes up Indonesia's land prices 25%

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The recent influx of Chinese investors into Indonesia has pushed up industrial property prices by 251 TP3T and activated industrial zones in West Java.This phenomenon stems mainly fromThe United States has imposed import tariffs of more than 301 TP3T on Chinese goods, while tariffs on Indonesian goods are only 191 TP3T.This has led Chinese companies to expand or move their operations to Indonesia to avoid high tariffs. In addition, Indonesia is the largest economy in Southeast Asia with a huge consumer market potential.The economy grew at a rate of 5.121 TP3T in the second quarter of 2025, the highest in nearly two years.A young demographic with a large pool of talent and labor attracts foreign investment to expand in Indonesia as soon as possible.In the first half of 2025, China and Hong Kong, China's investment in Indonesia increased by 6.51 TP3T year-on-year to US$8.2 billion.Indonesia's FDI grew by 2.58% to Rp432.6 trillion and the government is optimistic about investment growth in the second half of the year.

Demand surges in industrial zones like Subang Smartpolitan in West Java, industrial real estate and warehouse prices rose 15-25% year-over-year in the first quarter of 2025, the fastest increase in nearly 20 years, for exampleJakarta's office rents up 43% from last year. Related consulting firms are busy, such as PT Yard Zeal Indonesia has grown from 4 employees in 2021 to more than 40, and there are daily inquiries from Chinese companies about their industrial land needs, mostly seeking ready-made facilities. However, Indonesia hasBureaucratic red tape, poor infrastructure, industrial supply chain not as complete as China's, etc.. Some investors are wary of President Prabowo's fiscal policies, including a free food program for school children and pregnant women.

A motorcycle headlight manufacturer from China thinks it's easier to realize in Indonesia.Net profit margin for 20%-30%, while in China only about 3%; in Indonesia to establish a strong business presence, basically can control half of the market in Southeast Asia. The head of Bank of America's Indonesia representative office believesYoung demographics and large labor force are major attractionsThe ASEAN director of Dezan Shira & Associates said that in addition to supply chain diversification.Indonesia's huge domestic consumer market is one of its few advantages in the regionThe

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