Chinese Investors Write to Prabowo Complaining About Indonesia's Business Climate, Kadin Hopes for Quick Response
Indonesia is engaged in fierce competition with fellow ASEAN members to attract investment. The government needs to take the complaints from China seriously to prevent the erosion of investment inflows.
JAKARTA, KOMPAS — The Chinese Chamber of Commerce in Indonesia has written to President Prabowo Subianto regarding various investment barriers that burden Chinese business players. Amid tight competition to attract global investment in the region, the government is urged to promptly address several structural issues that could erode foreign investors’ confidence in Indonesia.
The complaints were conveyed by the Chinese Chamber of Commerce in Indonesia through a letter to Prabowo that has been widely circulated publicly since Tuesday afternoon (12/5/2026). Kompas has confirmed that the letter was officially issued by the Chinese Chamber of Commerce.
In the letter, Chinese investors highlight various classic issues that hinder investment in Indonesia. These include overly strict regulations, excessive law enforcement, and several new policies such as tax and royalty increases, export proceeds retention obligations, nickel ore quota reductions, tightened foreign worker permits, and allegations of corrupt practices and extortion by rogue authorities.
The letter, on behalf of all Chinese companies investing in Indonesia, emphasises that these investment obstacles have become increasingly apparent in recent times.
“These problems have disrupted normal business operations, directly damaging long-term investment confidence, and causing widespread concern among Chinese investment companies regarding the business climate and the future development of their businesses in Indonesia,” the letter states.
Deputy General Chairman of Kadin Indonesia for Regional Autonomy, Sarman Simanjorang, said the government needs to respond quickly and seriously to the complaints from Chinese business players to avoid lowering investor confidence levels and eroding investment inflows in Indonesia.
“The government needs to quickly rectify this so it does not spread to investors from other countries, which could lower confidence levels. The government’s Debottlenecking Task Force must investigate these complaints to rectify them swiftly,” Sarman said when contacted on Wednesday (13/5/2026).
Sarman reminded that Indonesia is currently in tight competition with other Southeast Asian countries in vying for global investment. Vietnam, Singapore, Thailand, and Malaysia are seen as continuously improving business ease and regulatory certainty to attract foreign investors.
“We are competing with other ASEAN countries to attract investors. Do not let the barriers we create ourselves reduce investors’ interest in entering Indonesia,” Sarman said.
Regarding allegations of excessive law enforcement and suspected corruption and extortion, Sarman believes the government needs to provide clarification and thorough investigation openly. This is important to ensure that emerging issues do not damage Indonesia’s image as an investment destination.
“Excessive law enforcement must certainly be clarified in which sector and which agency. Suspicions of corrupt practices and extortion by rogue authorities must also be verified for truth,” he said.
As a result, they will hesitate to enter Indonesia, our competitiveness in the eyes of investors will decline, and we fear they will divert their investments to countries deemed safer.
Sarman assessed that even the smallest investor complaints need to be taken seriously because they concern national competitiveness. If not handled promptly, investors may hold back expansion or even divert investments to other countries deemed safer and more conducive.
“The impact will be that they hesitate to enter Indonesia, our competitiveness in the eyes of investors declines, and we worry they will divert their investments to countries deemed safer, more comfortable, with smooth permitting, and free from levies,” he said.
In response to the complaint letter from Chinese business players, Finance Minister Purbaya Yudhi Sadewa, on Wednesday, alluded to many Chinese entrepreneurs in Indonesia engaging in illegal businesses.
“I have already complained to them (Chinese Chamber of Commerce), many Chinese entrepreneurs here also conduct illegal businesses. I asked him to fix it at that time, he promised to warn them. So, it’s two-way actually, no problem,” Purbaya said.
Meanwhile, regarding the complaint point on the implementation of export proceeds from natural resources (DHE SDA), Purbaya said there are exceptions in that policy. Thus, not all companies will be affected by the obligation to place funds in national banks.
“If I’m not mistaken, companies that do not borrow money in Indonesia will be exempt from DHE SDA, there is such an exception. So, China should have no problem,” he said.
In the letter, Chinese business players state that the planned export proceeds retention obligation for natural resources (DHE SDA) creates significant uncertainty for natural resource exporters, who are required to place 50 percent of their export proceeds in Indonesian state-owned banks for at least one year. This policy is seen as highly detrimental to company liquidity and long-term operations.
In addition to DHE SDA, investors also question repeated increases in taxes and mineral royalties. Responding to this, Purbaya explained that several policies complained about by investors are still in the planning stage and not fully implemented.
“For minerals, it’s fine, the minerals are ours. If others want to move, let them move. But where will they find the minerals? Not yet, not imposed, this is just a plan,” Purbaya said.
In the letter, Chinese business players highlight policies recently prepared by the Ministry of Energy and Mineral Resources, namely significantly increasing the benchmark price of nickel ore (HPM) and revising pricing regulations, including for the first time incorporating cobalt, iron, and other derivative minerals in the calculations.