ASIATODAY.ID, JAKARTA – A wave of concern from Chinese investors has now erupted into the open. In an official letter addressed to Indonesian President Prabowo Subianto, the China Chamber of Commerce in Indonesia (CCCI) delivered sharp criticism of Indonesia’s latest mining and industrial policies, particularly those affecting the country’s strategic nickel sector.
The letter, which circulated publicly on Wednesday, May 13, 2026, reveals mounting anxiety among Chinese companies that have become dominant players in Indonesia’s nickel smelting and downstream processing industries. Investors argue that the country’s business climate is becoming increasingly uncertain due to tighter regulations, rising levies, export restrictions, and shifting mineral pricing policies.
Despite the criticism, Chinese investors stressed that they still view Indonesia as a key strategic partner and one of the world’s most important hubs for the future electric vehicle supply chain. However, they warned that recent policy changes are placing heavy pressure on operational sustainability and long-term investment confidence.
The letter outlines six major concerns raised by Chinese businesses operating in Indonesia. These include rising taxes and mineral royalties, mandatory placement of export earnings in domestic banks, reduced nickel ore quotas, stricter forestry enforcement, and increasingly restrictive work visa requirements.
The sharpest criticism targets Indonesia’s nickel industry — the backbone of Chinese investment in the country. Investors claim that nickel ore quotas have been cut by as much as 70%, or roughly 30 million tons, disrupting the supply chain for downstream industries such as stainless steel and electric vehicle battery manufacturing.
Chinese companies also strongly criticized Indonesia’s revised Mineral Benchmark Price (HPM) policy for nickel ore. Under the new formula, cobalt, iron, and other associated minerals are now included in price calculations, a move investors say has pushed production costs up by as much as 200%.
“As the largest investors and operators in Indonesia’s nickel industry, Chinese-invested companies are now facing sharply rising production costs, widening operational losses, and growing imbalance across the industrial chain,” the letter stated.
Investors warned that the situation could threaten future investment flows, weaken Indonesia’s competitiveness in the global EV market, and impact hundreds of thousands of workers employed throughout the nickel supply chain.
Beyond economic concerns, Chinese investors also criticized what they described as excessive law enforcement practices. Companies complained about increasingly aggressive tax audits, multi-million-dollar penalties, and alleged corruption and extortion involving certain authorities.
The letter further referenced a Chinese-invested company reportedly facing a US$180 million penalty related to forestry permit violations — a case investors claim has intensified fear and uncertainty among foreign businesses.
Visa regulations also came under scrutiny. Chinese companies argued that tighter and more expensive work permit procedures are disrupting the mobility of technical experts needed for large-scale industrial projects across Indonesia.
Even so, Chinese investors reaffirmed their commitment to Indonesia-China economic cooperation and called on the government to improve legal certainty, maintain a stable investment climate, and establish more effective communication channels with foreign businesses.
Indonesia’s government has begun responding to the concerns. Energy and Mineral Resources Minister Bahlil Lahadalia confirmed that he has held discussions with several Chinese mining companies as well as representatives from the Chinese Embassy in Jakarta.
“Several companies have already communicated with me. The ambassador has also spoken with me, and I have provided explanations properly,” Bahlil said in Jakarta on Wednesday.
Amid mounting pressure, the Indonesian government has decided to postpone planned increases in mining royalties and export duties. The decision followed meetings between the Ministry of Energy and Mineral Resources and the Ministry of Finance aimed at gathering feedback from industry stakeholders.
The delay is widely seen as a signal that the government is reassessing its approach to ensure Indonesia’s ambitious downstream industrialization agenda does not discourage major investors from the country’s critical nickel sector.
The episode highlights a growing tension within Indonesia’s resource nationalism strategy. On one hand, the government is seeking to maximize state revenue and strengthen control over strategic minerals. On the other, foreign investors are demanding regulatory stability and clearer long-term policy direction.
Indonesia currently occupies a pivotal position in the global electric vehicle supply chain thanks to its vast nickel reserves. Chinese companies have poured billions of dollars into smelters, industrial parks, and battery material plants across Sulawesi and Maluku, transforming the country into one of the world’s most important nickel processing centers.
As a result, the protest letter sent by Chinese investors to President Prabowo is increasingly being viewed as a serious warning sign for the future of Indonesia’s nickel industry.
If Jakarta fails to balance national interests with investor confidence, the country risks slowing investment momentum at a time of intensifying global competition in the electric vehicle era. (AT Network)
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