Indonesia Utilizes Trade War Between US, China. Photo: by Special

JAKARTA (TheInsiderStories) –Indonesia is utilizing United States (US) and China trade war to grab new investment, said one official on Tuesday (07/30). In the first half of 2019, the country’ realization investment rose 9.40 percent to Rp395.6 trillion (US$28.26 billion) compared to same period in 2018 of Rp361.60 trillion.

Currently, said Head of the Investment Coordinating Board Thomas Trikasih Lembong, Indonesia was negotiating with various companies to relocate their factory from China ti Indonesia.

“President Joko Widodo has asked me to explore the gain that we can get on the trade war impact since the third quarter of 2018,” he said at his office.

Lembong explained that government is currently lobbying companies owners from China and Taiwan to relocate their factory. One company has responded to the invitation is the Apple iPhone maker, Pegatron Corp., from Taiwan.

The company aimed to relocated its factory to Batam with an investment of US$40 million. This factory will export goods of around $1 billion in starting 2021-2022.

Former minister of trade added that iPad manufacturer, Taiwanese Apple supplier, Compal Electronics, which is also rumored to be relocating its factory to Indonesia. Lembong said the offer of relocation occurred because China’ conditions were not conducive to labor-intensive industries.

He rated, its time for China to return the factories it took 20 years ago from from the Southeast Asian countries.

Is known, Chinese companies experienced slowdown during US-China trade war. US President Donald Trump imposes additional tariffs on products originating from China. The Companies began to move their production chains outside of China to avoid tariffs.

The phenomenon called trade diversion causes domestic shocks, especially companies that are unable to operate because the impact of trade competition turns out to benefit several countries.

Reportedly, importers from China are also looking for other countries as partners other than US. State countries such as Vietnam, Chile, Argentina, and even Malaysia have been positively affected by trade wars.

Lembong added, post the general election, the investor confidence to Indonesia rebound after hold their investment for several months. He acknowledged that this positive trend will continue in the future, especially supported by the strong determination of the government to continue economic reform, better utilization of Online Single Submission (OSS), and intensification of investment escorts by various relevant government agencies both at the center and area.

Lembong also believed by the end of this year the realization investment could grow double digit after suffered last year and early of this year.

Currently President Joko Widodo itself has seduce foreign investors as Indonesia grapples with the low level of foreign direct investment and the spread of current account deficit. Within a few months after his victory, he got a number of new agreements with a number of foreign partners, including printing the largest international investment in more than five decades.

Written By Willy Matrona, Email: theinsiderstories@gmail.com