Addressing Chinese Investor Concerns: Clearing the Mirrors of Indonesia's Business Environment
China is a major trading partner for Indonesia. Its concerns cannot be ignored. If the problems are not addressed, what will happen to other countries?
KOMPAS/AGUS SUSANTO
By the EDITORIAL TEAM
May 16, 2026 06:54 WIB · Editorial
The letter from the Chinese Chamber of Commerce in Indonesia to President Prabowo Subianto can be seen as a reflection of the business environment in Indonesia. This letter, which outlines the obstacles faced by Chinese entrepreneurs and investors, should be taken seriously. This is because other countries’ investors may also experience the same problems.
In January-March 2026, Indonesia’s non-oil and gas exports to China were worth $16.5 billion, or about 25.94 percent of Indonesia’s total non-oil and gas exports. The main non-oil and gas exports were iron and steel, nickel, and mineral fuels.
China is also Indonesia’s main importer of non-oil and gas products, which in the first quarter of 2026 were worth $22.02 billion, or 41.56 percent of Indonesia’s total non-oil and gas imports. The main non-oil and gas products imported were machinery or mechanical appliances and parts, machinery or electrical equipment and parts, and vehicles and parts.
Overall, Indonesia’s trade balance with China had a deficit of $4.23 billion in the first quarter of 2025 and a deficit of $5.18 billion in the first quarter of 2026.
China’s role in investment is also significant. According to the One Data on Trade, China’s investment in Indonesia in 2025 was worth $7.5 billion. Among Asian countries, this figure is lower than Singapore and Hong Kong.
The value of investments made by China-based investors ranged from $7 billion to $8.5 billion in 2022-2025. This figure is double the $3.1 billion in 2021.
The role of Chinese entrepreneurs and investors in Indonesia is in line with the number of tourist visits. The Central Bureau of Statistics recorded that in February 2026, there were 150,822 tourist visits from China to Indonesia. This number increased by 68.89 percent compared to February 2025. The data also shows that tourists from China accounted for about 13.01 percent of all foreign tourists visiting Indonesia, lower than the number of tourists from Malaysia (17.18 percent) but higher than Singapore (9.43 percent).
Given China’s significant role in the Indonesian economy, there is no longer any reason for the Indonesian government to delay resolving the issues raised by the Chinese Chamber of Commerce in Indonesia. What will happen to entrepreneurs and investors if these problems are not resolved? Imagine also what will happen to entrepreneurs and investors from countries whose trade and investment values are not as large as China’s?
The speed of resolving problems is one of the important things for investors. Moreover, in the global competition to attract investors and entrepreneurs.
The independent academic institution, IMD, published the World Competitiveness Report in June 2025. Indonesia is ranked 40th out of 69 countries. Specifically for business efficiency, Indonesia is ranked 26th, which is assessed based on indicators of productivity and efficiency, the labor market, finance, management practices, and attitudes and values.
In April 2026, Presidential Decree No. 4 of 2026 was issued on the Task Force for the Acceleration of the Government Program to Support Increased Economic Growth. The existence of this presidential decree is expected to accelerate the government program to support increased economic growth, which is targeted at 8 percent in 2029.
Specifically for business efficiency, Indonesia is ranked 26th.
Referring to the letter from the Chinese Chamber of Commerce in Indonesia, some of the issues that hinder investment in Indonesia include excessive law enforcement and several new policies, as well as alleged corruption and extortion by authorities. If Presidential Decree No. 4/2026 is used as a basis for improving economic growth, things that hinder investment should be eliminated.