The election of Donald Trump as the President of the United States (US) brought new policies, one of which was the imposition of import tariffs on products from China. This policy triggered trade tensions between the US and China, impacting the business strategies of Chinese companies. To avoid high tariffs and maintain competitiveness, many companies began seeking alternative locations to relocate their factories. The ASEAN region, including Indonesia, became a primary destination due to lower labor costs and broader market access.

Over the past year, the trend of Chinese companies relocating to ASEAN has been increasing. Besides the trade war factor, China's economic stagnation has also driven companies to look for more stable and profitable production locations. Countries such as Vietnam, Thailand, and Malaysia have successfully attracted significant investment from these companies due to investor-friendly policies and well-developed manufacturing infrastructure.

Indonesia has a great opportunity to take advantage of this trend and become a new industrial hub in ASEAN. However, to compete with other countries, Indonesia needs to improve its infrastructure, streamline investment regulations, and enhance workforce quality. With the right policies and a more conducive business environment, Indonesia can attract more companies looking to avoid global trade barriers and strengthen its position in the global supply chain.

 

Sources: Kompas.com