Bilateral trade a priority as China’s President visits Jakarta

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Chinese President Xi Jinping will be the second state leader to visit Jakarta this week. Many are looking to see how the leaders of the world’s second largest economy and Southeast Asia’s largest economy can collaborate to cement Asia’s position as the world’s engine of growth.

Trade between the Indonesian archipelago and China dates back to the 7th century and it is trade that still serves as a cornerstone of Sino-Indonesian ties centuries later.

Chinese President Xi Jinping’s visit is seen as an important moment to further enhance each other’s economic prospects.

Makmur Keliat, head of international relations of the graduate programme at the University of Indonesia, said: “If something happens with Indonesia in terms of our economic performance, then it will also affect China. And the same is true also if the economy in China declines then it would affect Indonesian economy.

“I think the key to our bilateral economic relationship actually is in our growth — both China and Indonesia.”

In recent years, both countries have recorded impressive economic growth despite a slowdown in the global economy, and China is Indonesia’s largest trading partner. Bilateral trade more than doubled from US$26.6 billion in 2009 to US$66.6 billion in 2012, and is expected to reach 80 billion US dollars by 2015.

Indonesia, for the most part, imports equipment and machinery from China, while China imports Indonesia’s natural resources.

Despite being such a large trading partner, China’s investment in Indonesia is only US$2.2 billion — almost half of what Indonesia invests in China.

Tantowi Yahya, a legislator with Golkar, said: “Why is a big and important country like China putting so little investment in us? Why? This is what needs to be answered by us, by the President, honestly.

“Probably it’s because of the many obstacles that foreign investors face here from time to time. Something like uncertainty in law, the infrastructure, electricity. This is what has to be answered and find a solution.”

Indonesia’s ambassador to China with the Investment Coordinating Board aims to make China its fifth largest investor. He has met many of the country’s top 500 companies, and that one-on-one business and investment dialogue with Chinese investors is paying dividends.

Whilst in Indonesia, President Xi is expected to oversee the signing of US$20 billion of trade deals, including a joint venture to develop the Jakarta monorail system. Indonesian officials are also looking into extending their bilateral currency swap agreement with China to boost the rupiah, which has been substantially weakened.

During his visit, President Xi will also be making a special appearance before Parliament. President Xi Jinping will deliver a special address in front of Parliament — a rare honour and a first for a visiting Chinese politician.

 

 

Source : Channel News Asia | October 1, 2013

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Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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