Jakarta, March 24 (Antara)- Indonesia is intensifying the promotion of its export products through various activities, including organizing exhibitions and attending business forums in China, in an effort to balance its trade deficit, which reaches US$14 billion.
"The trade deficit, which is in favor of China, is caused by the fall in the prices of commodities that we are exporting to that country. Now, the two nations must work hard to balance bilateral trade and to step up economic cooperation," Trade Minister Thomas Lembong stated on the sidelines of his activities while attending the Boao Forum for Asia (BFA) in Hainan, China, on Thursday.
Tourism and investment promotions are some steps that can be taken to maintain the trade balance and enhance cooperation between the two countries, Minister Lembong explained.
"If our funds, amounting to US$14 billion, flow to China, but they return in the form of investment, our relations and economic cooperation will become balanced. It will also be the same if many Chinese tourists come to Indonesia. Income from the tourism sector will be able to balance the economic deficit between the two nations," the trade minister emphasized.
Data at the Chinese Immigration authority indicated that China's imports from Indonesia in 2015 stood at US$19.8 billion, while its exports to the latter were recorded at US$34.4 billion.
In order to increase Indonesia's exports to China, it should be creative and be able to identify potential sectors.
According to Minister Lembong, Indonesia's lifestyle sector has food, beverage, and fashion products that have the potential to be exported to China.
"Maybe, it is difficult to imagine now that our lifestyle products industry will show major growth in future and will be able to penetrate the Chinese market, but I can see the trend," Lembong pointed out.
He noted through an SMS to Antara on the sidelines of the BFA that China was transitioning from a production- to consumption-oriented economy.
"So, we have to switch over to the production of consumer goods, which are in demand in China. Our exports to China should be different from those in the past, without losing focus on the exports of products such as crude palm oil. However, I forecast that the exports of our lifestyle products would increase," he remarked.
Therefore, Indonesia is intensifying the promotion of its flagship food and beverage products through exhibitions in China. It is now participating in the three-day 94th China Food and Drinks Fair (CFDF) in Chengdu, China, from March 24 to 26, 2016.
Trade Attache of the Indonesian Embassy in Beijing Dandy S. Iswara stated that the CFDF was an international-scale exhibition that had been held since 1955. Indonesian food and beverage companies taking part in the Chinese exhibition included PT Tiga Pilar Sejahtera Food, which displayed Taro small tart cakes, Nabati vegetable-based products, richess, honey, and ginger candies.
Another company PT Deli Indo Duta Sukses is promoting "Lapis Legit" cakes and shrimp spring roll snacks at the event. Other products on display are Delfi, Silver Queen, Cha Cha chocolates, biscuits, "Teh Botol Sosro" and Tesseor tea, as well as Fruit tea and Tebs soda tea.
Dandy affirmed that China had the potential and an open market for food and beverage products.
"This is because the purchasing power of the Chinese people for imported food and beverage products continues to increase," he added.
In order to balance the deficit through investment, the Indonesian and Chinese governments are targeting China's investment commitments in Indonesia to reach US$30 billion in 2016.
Head of the Indonesian Investment Coordinating Board (BKPM) Franky Sibarani stated while accompanying Vice President Jusuf Kalla on a visit to Sanyang city, Hainan Province, China, on Wednesday to meet several Chinese investors.
"The value of China's investment commitments to Indonesia is expected to reach US$30 billion in 2016. As of February 2016, we have issued principle licenses worth 10 percent of the targeted value," Franky said.
To promote the realization of China's investment in Indonesia, the government will open a representative office of the BKPM in China. The office will facilitate the Chinese investors by providing information on the process of investing in Indonesia.
"By June, there will be a BKPM representative office here. We expect that Indonesia's promotional activities would be carried out more easily than earlier. The BKPM representative office in China will be the ninth to be set up abroad," he explained.
Regarding investment constrains, Chinese investors still often face problems with land permits in Indonesia, as happened with PT Virtue Dragon Nickel Industri in Southeast Sulawesi.
Vice President Jusuf Kalla, who received the Virtue Dragon leaders in Hainan on Wednesday, said the problem would be resolved soon through coordination between the Capital BKPM and the local government in the region.
Jusuf Kalla was visting Hainan to attend and deliver a speech at the opening of the Boao Forum for Asia (BFA) which focuses on the Future of Asia in Hainan Province.
"We assure that the land problem there will be resolved soon. They have invested in the nickel business in Southeast Sulawesi, and would invest US$5 billion. So far, the realization has reached one billion US dollars," Kalla said.
The vice president promised to resolve the land issue within a month.
He explained that the problem related to land licenses for foreign investors, particularly Chinese investors. Admittedly, there are problems that involve the local people, particularly those living outside Java.
"Implementation of a project on the ground faces many constraints, particularly when it involves local residents. That is because things are different than in China where all land belongs to the state and the government can directly decide on allocations," Kalla added.
Such a problem is not just faced by foreign investors setting up infrastructure projects in various regions of Indonesia, but also by government projects.
The total amount of foreign investment, excluding in the upstream oil and gas and financial sectors, from China to Indonesia during 2010 to 2015 reached US$2.1 billion.
Data obtained from the BKPM revealed that China ranked 11th in realizing its foreign investments in Indonesia.
In 2016, the governments of Indonesia and China have committed to securing principle investment worth US$30 billion.***3***(A014/INE)EDITED BY INE(T.A014/A/BESSR/A. Abdussalam) 24-03-2016 15:24: |
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