JAKARTA: Indonesia's Finance Minister Purbaya Yudhi Sadewa will meet with Chinese investors and his Chinese counterpart, Lan Fo'an, during a visit to Beijing this week, with a sale of yuan-denominated bonds at the top of his agenda.
Purbaya's trip to China comes at a sensitive moment in the economic relationship between the two countries, with Chinese companies complaining recently about the worsening business climate in Indonesia.
Here are some details of his trip:
* The main agenda for the trip involves the preparation for Indonesia's sale in mainland China of yuan-denominated bonds, known as panda bonds, according to a statement from the finance ministry on Wednesday (June 17).
* Purbaya is scheduled to meet with Lan on Wednesday and meetings are also arranged with Chinese businesspeople and investors as well as officials with the People's Bank of China, the Shanghai Cooperation Organisation Development Bank and the Asian Infrastructure Investment Bank.
* The Financial Times reported this month that the Chinese embassy, in a letter to the mining ministry, said US$50 billion of investments in Indonesia could be at risk from policy changes that stand to disrupt the nickel industry.
* The China Chamber of Commerce sent a letter to President Prabowo Subianto warning that tighter nickel ore quotas, higher taxes and a new pricing formula were driving up costs and threatening investment, Reuters reported last month.
* Indonesia's financial markets have also come under pressure this year, with the rupiah hitting record lows and the stock market down nearly 30 per cent, as investors cool on South-East Asia's biggest economy and Prabowo's economic agenda.
* Purbaya's trip aims to broaden Indonesia's bond investor base, the finance ministry said.
* "We came to Beijing because Indonesia is in a strong position to build mutually beneficial cooperation," Purbaya said.
* In a quote that appeared in an earlier version of the ministry's statement, Purbaya stressed that the trip was "not out of pressure", but this was later revised without explanation.
* The panda bond issuance will support Indonesia's plans to diversify away from the US dollar for bilateral transactions, including by coaxing Indonesian and Chinese businesses into using respective local currencies for transactions, the ministry said.
* Indonesia held its maiden sale of so-called dim sum bonds, or yuan bonds sold outside of mainland China, last year. - Reuters
