Indonesia Prays Export To China Go Up 10%

Chinese PM Li Keqiang Met Indonesian Businesses - Photo by Chinese President Office

JAKARTA (TheInsiderStories) – Indonesian Trade Minister Enggartiasto Lukita prayed the country export to China could go up at least 10 percent in this year followed the Prime Minister Li Keqiang visited on Monday (07/05). Last year the trade values between the two countries reached US$60 billion and created a trade balance deficit for Indonesia.

In the meeting with President Joko Widodo at the Bogor Palace, Li has agreed to import more products from Indonesia especially agriculture products. Both leaders also concurred to boost the investment in the four economic corridors under Belt & Road Forum (BRF) initiatives.

The BRF initiative aims to connect Asia and Europe in a vast network of roads, railways, pipelines, airports, sea ports, transnational electrical grids and fiber optic lines of communication through the creation of an economic land belt traversing Central Asia and the Middle East as well as a maritime road that links China with the ports of the Indian Ocean, East Africa and Mediterranean.

Observers say the BRF connects with the Joko Widodo government to develop a sea high way across the archipelago. The goal of BRF is to bolster trade by overcoming one of the biggest impediments to global growth, chronic lack of infrastructure.

The Indonesian government has proposed $28 billion worth of infrastructure projects during to China. The country has proposed projects close to the South China Sea such as North Sumatra, North Sulawesi and North Kalimantan in areas of tourism, industrial zone and infrastructure projects such as toll roads, ports and airports to support economic development in those areas.

“We have proposed investment of US$28 billion, in which US$21 billion for projects in Kuala Tanjung, Sei Manke, LRT as well as other projects in North Sumatera,” National Development Planning Minister and Head of National Development Planning Agency Bambang PS Brodjonegoro has said.

The remaining investments will be for projects in Bitung and Pal Beach, Likupang, North Sulawesi. The other potential projects are plantation, mini LNG terminal, coal-fired power plants and smelter projects.

In the meeting with Indonesian businessman with premier Li, Vice President Jusuf Kalla remarked, there is amount of business cooperation opportunities to develop between the two countries. In general, he continued, the bilateral relationship with China has increased since the introduction of the comprehensive strategic partnership between the two countries by 2013.

Chinese PM Li Keqiang and VP Jusuf Kalla at Indonesia-China Business Summit – Photo by Chinese President Office

He described, China become the largest trading partner of Indonesia and is reflected in trade balance value in 2017 which is increased 24 percent to $60 billion from $48 billion in 2016. He expected in the future the interchangeable reduce the trade deficit between Indonesia and China declining from last year worth of $12.7 billion.

“In the field of trade boost two-way trade by seeking the balance of trade balance remained. Indonesia expects the increase in Chinese imports over the current leading Indonesian products like CPO, biodiesel, coffee, tropical fruit, footwear and jewelry products. I also wish promotion of our products in portal renowned by Chinese e-commerce,” added Kalla.

In term of investment, he continued, China become the third-largest investor in Indonesia and he hope we become even greater in the future. Chinese investment in the Indonesia amounted $3.4 billion in 2017.

He explained, China became the second largest infrastructure development investor in Indonesia. With the partnerships he believed will be strengthened the investment especially to rebuild four economic corridors integration across Indonesia.

In bid tourism, China also recorded as the largest foreign travelers in the country, reached 2 million tourists in 2017. Further ahead, Kalla prayed the Chinese tourists improve to 3 million tourists and become 5 million by 2020 by encourage an increasing number of direct flights between the two countries.

In addition, The Panda’s country has involved in the digital economy. He gave an example in 2017, Tencent Holdings has invested $1.2 billion in local ride-hailing provider Go-Jek, Alibaba Group invest of $1.1 billion in e-commerce retailer Tokopedia, and consortium $350 million in an unicorn Traveloka.

“Outlook in our digital economy deemed promising. In the last five years investment in digital economy grew 88 times. Total investment into digital economy about $5 billion dollars in the last three years,” said Kalla.

He hoped Chinese government and business circles bring more investment to the country especially in the industrial sector of manufacturing, energy, processing, environmentally friendly, and infrastructure development, prioritize Indonesian labor, provide added value for the upstream and downstream industry, protecting the environment, ensuring product quality and service excellence and bring technology transferred.

In the field of maritime infrastructure, Kalla sees the synergies between the axist of the world, BRF will provide new business opportunities for companies worth tens of billions

“I believe the business forum will provide an opportunity for the two countries to explore business cooperation opportunities. Ill only that, I hope after the business forum there is an attempt to follow up and to translate the commitment to work together become a concrete business projects and mutually beneficial,” he said at the end of his speech.

During President Xi Jinping’s visit to Indonesia in 2013, the two sides charted a course for the development of bilateral relations, which have embarked on a fast lane of growth, Li said. “Business cooperation has been the most vibrant and productive component of overall relations.”

He proposed closer cooperation in such fields as investment, industrial capacity, trade and people-to-people exchanges. Premier Li expressed China’s willingness to forge greater synergy between the Belt and Road Initiative and Indonesia’s vision as a global maritime fulcrum.

China will support Chinese companies in participating in the development of Indonesia’s regional comprehensive economic corridors, encourage Chinese enterprises to support Indonesian’s infrastructure improvement and explore cooperation in ports, maritime economy, industrial processing and overseas warehouses, he said, adding that Indonesia is also welcome to open an investment promotion center in China.

He also elaborated on China’s stance on trade and investment liberalization and facilitation. Li stated: “The two sides have also agreed to boost cross-border e-commerce to facilitate the cooperation between small and medium-sized enterprises.”