Chinese Investors Write to President Prabowo, Highlight Business Climate Issues in Indonesia
Several Chinese investment companies operating in Indonesia have submitted an official letter to President Prabowo Subianto regarding a request for improvements to the national business climate.
The letter was sent via the China Chamber of Commerce in Indonesia and copied to the Embassy of the People’s Republic of China in Indonesia.
In the letter titled Letter Requesting Improvement of the Business Environment, the investors stated their continued support for Indonesia’s economic development and government policies.
They assessed that Chinese companies have thus far contributed to economic growth, job creation, and national industrial development.
However, the business actors admitted to facing various obstacles deemed to disrupt business operations and diminish long-term investment confidence.
In the letter, the investors highlighted several key issues, from regulations seen as increasingly stringent to enforcement practices considered excessive.
“These problems have severely disrupted normal business operations, directly damaging long-term investment confidence, and causing widespread concerns among Chinese investment companies regarding the current business environment and their future development in Indonesia,” the letter stated, as quoted by Warta Ekonomi on Tuesday (12/5/2026).
Some issues raised in the letter include increases in taxes and levies, including mineral resource royalties, as well as intensive tax inspections accompanied by large fines. Then there is the policy mandating the placement of export proceeds from natural resources in state-owned banks, which is seen as disrupting company liquidity.
Furthermore, significant cuts to nickel ore production quotas, even described as reductions exceeding 70% at some major mines. Then there is the tightening of forestry law enforcement, including fines of up to US$180 million against companies deemed to lack forest area borrowing permits.
Additionally, the halt of strategic projects, including hydropower plant projects accused of environmental damage.
Moreover, investors also highlighted the increasingly complicated and expensive work visa permitting process, which hampers the mobility of foreign experts and management.
The nickel sector is a primary focus in the letter. Investors stated that changes in mineral benchmark pricing policies and new cost calculation rules have caused production costs to surge by around 200%.
As major investors in Indonesia’s nickel industry, Chinese companies claim to face sharply rising operational cost pressures, potential business losses, and risks to the industrial chain involving more than 400,000 workers.
The investors assessed that several government policies remain insufficiently stable and consistent. They also criticised standards of law enforcement in taxation, environment, and forestry, which are seen as lacking transparency and providing too much discretion to officials.