In order to reduce pressure on the trade deficit between Indonesia and China, the government is seeking increased investment in various fields such as the paper (pulp and paper) industry in terms of loan agreement; mining and transportation; investment funding; joint investment; cement industry development; smelter procurement; industrial area in West Java and Jakarta Monorail construction.
Speaking in Jakarta on Tuesday (October 1), Industry Minister, Mohamad S. Hidayat, who was accompanied by members of the management board of the Indonesian Chamber of Commerce and Industry (KADIN INDONESIA), namely G. Sulistiyanto representing Sinar Mas Group and Sinta Kamdani as Vice Chairman of KADIN Indonesia for Environment, Climate Change, and Sustainable Development, stated that government representatives and entrepreneurs of both countries will meet in Indonesia-China Business Luncheon in Jakarta, Thursday (October 3). Dialogue in this forum is part a series of visits of Chinese President, Xi Jinping, to Indonesia, associated with the implementation of APEC leaders’ meeting in Bali, October 7-8, 2013.
“The Business Forum which will be attended by about 300 Chinese and 500 Indonesian delegates will sign a more binding agreement with a cooperation and investment value of more than USD 32.8 billion, by around 21 companies. The value of the business cooperation is expected to reduce the trade deficit between Indonesia and China because so far the value of Indonesia’s imports to China is higher than Indonesia’s exports to China”, said Hidayat who was also accompanied by the Director General for International Cooperation of the Industry Ministry, Agus Tjahajana.
So far, the partnership between Indonesia and China is done more in term of increasing trade relations. China’s investment in Indonesia is still limited, only in some specific projects. Data of the Ministry of Industry shows that in 2012 the value of China’s investment in Indonesia is only worth USD 141 million with a number of 190 projects, an increase compared to 2011 where it reached USD 128.2 million with 160 projects. Meanwhile, China’s investment realization in Indonesia during the first quarter of 2013 has reached USD 60.2 million with 99 projects.
Value of Indonesia’s non oil & gas exports to China during January – June 2013 reached USD 10.09 billion, while Indonesia’s non oil & gas imports from China reached USD 14.42 billion in the same period.
“There are a lot of mining materials and minerals which is still in the form of raw materials from Indonesia exported to China, processed there, and eventually re-exported to Indonesia in the form of finished mineral products and mining products. This cooperation will be more binding, especially in terms of financial and banking support from China”, said Hidayat.
On the same occasion, Deputy Coordinating Minister of Economic Affairs for Economic and Trade Cooperation, Rizal Affandi Lukman, said that the cooperation between the two countries have already started since a few years ago, but most will be implemented in 2014. A number of projects will be expected be absorb additional labor force in large numbers. As for the procurement of nickel and aluminum smelter, on smelter would be able to absorb 2 thousand to 2,500 new workers.
Business News - October 4, 2013