Jakarta, August 26, 2025 – The world is turning its eyes to Indonesia. Not in the past twenty years has there been such a dramatic surge in demand for industrial property as in 2025. According to a recent report from Reuters, Chinese manufacturers are flocking to Indonesia, relocating production lines to escape suffocating U.S. tariffs. The motivation is straightforward yet game-changing: while the U.S. imposes tariffs above 30%, Indonesia offers lower costs, a vast domestic market, and stable economic growth.1
Chinese Investors Relocate Production, Indonesia Becomes a “Safe Haven”
The ongoing trade tensions between the United States and China are not merely political theater—they are reshaping Asia’s industrial property landscape. With U.S. tariffs now exceeding 30%, Chinese companies see Indonesia as an attractive exit route, where tariff levels average around 19%.
The ripple effect is undeniable:
Demand for industrial estates in West Java and areas near major ports has skyrocketed.
Industrial property prices surged 15–25% year-on-year—the steepest rise in two decades.
Direct investment from China and Hong Kong grew 6.5%, reaching US$ 8.2 billion in just the first half of 2025.1
Domino Effect: From Warehouses to a New Economic Ecosystem
This boom benefits not only industrial estate developers but also creates a domino effect across supporting sectors: logistics, warehousing, transportation, and even SMEs in surrounding regions.
Economists are calling this Indonesia’s “golden phase” in industrial real estate. One senior industrial property analyst in Jakarta put it bluntly:
“This is a rare moment. Indonesia is on track to become Southeast Asia’s next manufacturing and logistics hub.”
Challenges: Infrastructure and Regulation Remain Key Hurdles
But golden opportunities always come with challenges. Infrastructure bottlenecks, bureaucratic delays, and land-use regulations still present obstacles. Unless addressed swiftly, they could slow down the momentum.
Yet if policymakers take decisive action, Indonesia has the potential to cement itself as one of Asia’s primary industrialization hubs within the next five years.