Indonesia turns to China for growth

Jakarta: Indonesia may have recently become a major market for Chinese mobile phone makers Xiaomi and Oppo, but this so far has not changed the attitudes of many Indonesians who still look down on made-in-China products because of their reputation for being inferior.

At the same time, many others may have felt irritated after media reports surfaced on the alleged flow of illegal Chinese labour across the archipelago, refuelling anti-Chinese sentiments that once triggered bloody riots in the country back in 1998.

However, despite all the prejudice about China, its people and what they produce, Indonesia, like many other countries, will need resources owned by the world’s second largest economy to keep pace in its development.

The International Monetary Fund (IMF), for example, recently said that China remained the world’s largest economic growth engine in 2016, a position it has retained over the last several years.

The IMF estimated that the country contributed 1.2 percentage points to global economic growth last year through various channels such as trade, market and investment. The United States, the world’s largest economy, and Europe, meanwhile, followed with 0.3 and 0.2 percentage points, respectively.

With such potential, it is not unusual that President Joko “Jokowi” Widodo has been intensifying his administration’s attempt to court China into making various business deals in the archipelago.

Since taking office in October 2014, the president has held a series of meetings with Chinese businessmen, with one of the most notable being Jack Ma, chairman of the Chinese online marketplace Alibaba Group Holding Ltd.

The Investment Coordinating Board has also created a special desk to facilitate Chinese investors with all services provided in their language.

But the question is, are these moves enough to convince Chinese investors to pour their money into the country?

The secretary-general of the China Chamber of Commerce in Indonesia, Liu Cheng, acknowledged that economic cooperation between the two countries had been improving in recent years and pointed to the country’s special interest in manufacturing, e-commerce and ferronickel mining as an example of such strides.

“Ferronickel is greatly needed in China and Indonesia is rich with it,” Cheng said on Wednesday, adding that Chinese businesses planned to put investment worth US$3bil (RM13.5bil) in the near future in the sector.

There are at least 200 Chinese firms in Indonesia, with 30 of them operating in the mining sector and the rest in various sectors, including power plants, electronics, agriculture and logistics. — The Jakarta Post / Asia News Network