The US imposed a 19% reciprocal tariff (the "Trump tariff") on Indonesia, which is predicted to attract investment in the industrial and manufacturing sectors. Compared to neighboring countries and regions such as Taiwan (20%) and Vietnam (20%), Indonesia's 19% tariff is relatively low, making it somewhat attractive to certain foreign investors. However, this investment interest is limited to specific products.
Since early 2025, Chinese and East Asian companies have shown increased investment interest in Indonesia's Jababeka Industrial Estate, with a rise in visits as well. The US tariff policy has driven the "China+1" strategy, making Indonesia (including Jababeka) a destination for factory relocation. Chinese companies planning to expand or build factories in Indonesia are mainly from sectors such as energy, electric vehicle ecosystem, electronics, and logistics.
Chinese automotive companies are increasing their investment in Indonesia. For example, BYD has committed to building a factory in Indonesia, and Chery is also considering establishing a factory there. Chinese EV companies' overseas investment has exceeded domestic investment for the first time, with a total of US$16 billion. To avoid high tariffs in Europe and the US, they are building production facilities overseas, with battery manufacturers accounting for three-quarters of overseas investment.
Jababeka plans to seize investment opportunities through several projects, including transforming Jababeka Cikarang into part of Greater Jakarta to attract investors; developing Jababeka Industrial Estate projects in Kendal and Batang to attract labor-intensive industries and EV sector investments, with government support and economic zone infrastructure, and the cost competitiveness of Central Java as an industrial base; preparing the Tanjung Lesung Special Economic Zone project, leveraging the nearly completed 89 km highway and feeder airport to develop it into an international marine tourism destination; and planning the Morotai project, starting with tourism and fishing industries, eventually turning it into an international logistics hub in eastern Indonesia.
The Center for Economic and Legal Studies recommends that the government establish a special task force to handle the relocation of Chinese factories to Indonesia, ensuring that foreign investors do not abandon their investment plans in Indonesia. This task force will be responsible for following up on Chinese companies' relocation plans to Indonesia, addressing their needs, especially in labor-intensive industries, to absorb Indonesia's workforce and unemployed workers in these sectors.
The US imposed a 19% reciprocal tariff (the "Trump tariff") on Indonesia, which is predicted to attract investment in the industrial and manufacturing sectors. Compared to neighboring countries and regions such as Taiwan (20%) and Vietnam (20%), Indonesia's 19% tariff is relatively low, making it somewhat attractive to certain foreign investors. However, this investment interest is limited to specific products.
Since early 2025, Chinese and East Asian companies have shown increased investment interest in Indonesia's Jababeka Industrial Estate, with a rise in visits as well. The US tariff policy has driven the "China+1" strategy, making Indonesia (including Jababeka) a destination for factory relocation. Chinese companies planning to expand or build factories in Indonesia are mainly from sectors such as energy, electric vehicle ecosystem, electronics, and logistics.
Chinese automotive companies are increasing their investment in Indonesia. For example, BYD has committed to building a factory in Indonesia, and Chery is also considering establishing a factory there. Chinese EV companies' overseas investment has exceeded domestic investment for the first time, with a total of US$16 billion. To avoid high tariffs in Europe and the US, they are building production facilities overseas, with battery manufacturers accounting for three-quarters of overseas investment.
Jababeka plans to seize investment opportunities through several projects, including transforming Jababeka Cikarang into part of Greater Jakarta to attract investors; developing Jababeka Industrial Estate projects in Kendal and Batang to attract labor-intensive industries and EV sector investments, with government support and economic zone infrastructure, and the cost competitiveness of Central Java as an industrial base; preparing the Tanjung Lesung Special Economic Zone project, leveraging the nearly completed 89 km highway and feeder airport to develop it into an international marine tourism destination; and planning the Morotai project, starting with tourism and fishing industries, eventually turning it into an international logistics hub in eastern Indonesia.
The Center for Economic and Legal Studies recommends that the government establish a special task force to handle the relocation of Chinese factories to Indonesia, ensuring that foreign investors do not abandon their investment plans in Indonesia. This task force will be responsible for following up on Chinese companies' relocation plans to Indonesia, addressing their needs, especially in labor-intensive industries, to absorb Indonesia's workforce and unemployed workers in these sectors.