China Chamber Writes to Prabowo on Business Climate Concerns<\/p>\n
Reporter<\/p>\n
May 13, 2026 | 05:02 pm<\/p>\n
TEMPO.CO, Jakarta - The China Chamber of Commerce in Indonesia has\nsent a letter to President Prabowo Subianto urging the government to\nimprove Indonesia\u2019s business climate, citing growing concerns among\nChinese investors over regulations, law enforcement, and policy\nuncertainty.<\/p>\n
In the letter, the chamber said Chinese companies have invested\nheavily in Indonesia, contributed to economic growth, created jobs,\nsupported industrial development, and fulfilled social responsibilities.\nHowever, companies are increasingly facing operational difficulties.<\/p>\n
The organization complained that businesses operating in Indonesia\nare burdened by overly strict regulations, excessive law enforcement,\nand corruption and extortion involving certain authorities.<\/p>\n
\u201cThese problems have severely disrupted normal business operations,\ndirectly undermined long-term investment confidence, and caused\nwidespread concern among Chinese-invested enterprises regarding the\ncurrent business environment and their future development in Indonesia,\u201d\nthe letter stated.<\/p>\n
First, the chamber complained about repeated increases in taxes and\nfees, including multiple hikes in mineral resource royalties. It also\nhighlighted intensive tax audits, some involving claims worth tens of\nmillions of US dollars, which it said had created panic among\ncompanies.<\/p>\n
Second, the organization criticized the government\u2019s foreign exchange\nretention policy for natural resource exporters, which requires\ncompanies to deposit 50 percent of export earnings in state-owned banks\nfor at least one year. According to the chamber, the policy creates high\nuncertainty and could severely affect company liquidity and long-term\noperations.<\/p>\n
Third, the chamber raised concerns over drastic reductions in nickel\nore mining quotas. Since the beginning of the year, quotas for major\nmines have reportedly been cut by more than 70 percent, with total\nreductions reaching 30 million tons. The cuts, it said, have disrupted\ndownstream industries such as new energy materials and stainless steel\nproduction.<\/p>\n
Fourth, the chamber said forestry law enforcement has become\nexcessively strict. It cited a record US$180 million fine imposed by\nIndonesia\u2019s Special Task Force for Forest Management on Chinese-invested\ncompanies accused of lacking valid forest area borrow-and-use permits,\nknown locally as IPPKH.<\/p>\n
Fifth, the organization said several major projects had been\nsuspended following government intervention. Authorities accused large\nhydropower projects financed and built by Chinese companies of damaging\nforest areas and worsening floods, resulting in work stoppages and\nsanctions.<\/p>\n
Sixth, the chamber criticized tighter supervision of foreign worker\nvisas. It said work permit approvals have become increasingly\ncomplicated, with higher costs, stricter requirements, and restrictions\nsuch as designated work locations that limit the mobility of technical\nand managerial personnel.<\/p>\n
\u201cIn addition, relevant government departments are considering further\nmeasures, including new export duties on certain products, the abolition\nof incentives for electric vehicles, and reduction of tax relief for\nspecial economic zones,\u201d the letter stated.<\/p>\n
The chamber also highlighted increases in benchmark mineral prices\nfor nickel ore, cobalt, iron, and other minerals. It said the revised\npricing rules had triggered a 200 percent surge in nickel ore costs.<\/p>\n
According to the chamber, Chinese companies are now facing rising\nproduction costs, mounting operational losses, and supply chain\nimbalances that are beginning to affect future investment, exports, and\nemployment.<\/p>\n
The organization urged the Indonesian government to maintain a\nstable, transparent, fair, and predictable business environment,\nstabilize policy expectations, standardize law enforcement practices,\nand protect the legal rights of foreign investors.<\/p>\n
It also called on authorities to listen more closely to business\nconcerns, revise unreasonable policies and enforcement practices, and\nimprove communication mechanisms between the government and companies to\naccelerate problem-solving.<\/p>\n
\u201cWe are confident that with Your Excellency\u2019s attention and\nfacilitation, China-Indonesia economic and trade cooperation will\ncontinue to develop steadily and soundly, and Chinese-invested\nenterprises will continue to contribute greater strength to Indonesia\u2019s\nnational development and the friendly cooperation between the two\ncountries.\u201d<\/p>\n
Read: Indonesia Launches Investor Complaint Channel to Boost\nInvestment<\/p>\n
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