As tariffs hammer Chinese exports to the United States, manufacturers are urgently expanding their search for new buyers across the globe, with Indonesia emerging as a key target.
At a textile and garment trade fair in Jakarta this month, Chinese exhibitors outnumbered their Indonesian counterparts more than two to one. Roughly 400 Chinese manufacturers showcased their goods, many attending for the first time in a bid to offset plummeting U.S. demand.
“We came here to see if we can open up new markets and make up for the loss of U.S. consumers,” said Wang Chengpei, who runs Suzhou Feimosi Textile Technology, a company that once derived about 30% of its revenue from U.S. orders. Now, around a third of those orders are on hold due to new American tariffs.
The dramatic shift comes after the White House imposed 145% tariffs on Chinese goods this year. China’s exports to the U.S. accounted for approximately $500 billion last year — about 15% of its total goods exports, according to Chinese customs data. Research from Oxford Economics found that about a fifth of these exports are highly dependent on American buyers, putting an estimated 10 to 20 million Chinese jobs at risk.
Facing fierce domestic competition and a stagnating local economy, Chinese manufacturers are left with little choice but to seek international opportunities. Many companies are increasingly turning to regions like Southeast Asia, Europe, the Middle East, and Africa.
“To be frank, personally speaking, all we can do is go out and look for new opportunities,” said Qian Xichao of Wujiang City Hongyuan Textile, attending the Jakarta fair for the first time.
While China’s leadership has pledged to boost domestic consumption and companies like JD.com have launched initiatives to help exporters pivot locally, demand within China remains weak. Years of property market collapse and slowing economic growth have left households and businesses reluctant to spend. Consumer prices have stagnated, factory-gate prices have been falling for over two years, and imports continue to decline.
Despite the promise of new markets, many Chinese manufacturers are finding the transition challenging. Some booths at the Jakarta fair were sparsely attended, and salespeople often sat idle as local buyers passed by. Baoji Changxin Cloth exhibited thick cotton and polyester fabrics, but manager Xi Ya admitted their products might not suit Indonesia’s hot, humid climate.
“Our product may not match well in the market,” she observed.
Meanwhile, some Indonesian businesses are wary of the growing Chinese presence. Martin Sutanto, sales and marketing director for Indonesian fabric producer Fabriku, said there was an uptick in U.S. market inquiries but warned about the threat of cheap Chinese imports overwhelming local producers.
“If China’s product floods the Indonesia market, that’s going to be hard for us,” he said.
Some Chinese companies are holding off on making big moves, cautious of the volatility in U.S. trade policy. “There’s nothing we can do about the tariffs. We’ll have to wait until the tariffs stabilize before proceeding, otherwise you wouldn’t dare take the risk,” said Michael Wang of Shaoxing Double-Color Textile.
Although analysts from Allianz project that exports to countries like the EU, the U.K., Vietnam, Taiwan, Malaysia, Mexico, Singapore, Saudi Arabia, and Nigeria could grow about 6% annually over the next three years, finding a true substitute for the American consumer remains a monumental challenge for China’s vast manufacturing base.
