Indonesia seeks more Chinese investment

0 CommentsPrint E-mail China Daily, May 3, 2011
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Indonesia is looking to attract more direct investment from China over the coming years. The country, a member of the Association of Southeast Asian Nations trading bloc (ASEAN), hopes the move will help to narrow a gap in bilateral trade that has been widening in recent years.

"The trade volume between Indonesia and China has seen remarkable growth during the past five years, and to better help us access the Chinese market and increase our exports, we hope Chinese businesses will increase their investment in Indonesia," Minister of Trade Mari Elka Pangestu told China Daily.

According to China's General Administration of Customs, the volume of trade between the two countries reached $42.75 billion last year, a 50.6 percent increase year-on-year from 2009. Meanwhile, cooperation in areas such as culture and education has also increased significantly.

Pangestu said although bilateral trade has seen rapid growth, the countries still need to ensure a balance, as Indonesia's trade deficit with China rose slightly last year, compared with 2009.

Indonesia's exports to China could become more diverse and could be helped by more investment from Chinese companies, not only to finance the production of components, but also to sell goods to countries worldwide, including China, the minister said.

Chinese investment in Indonesia has risen over the past 12 months, fueled by the inauguration of the China-ASEAN Free Trade Area (CAFTA) in January 2010. By the end of that year, more than 1,000 Chinese businesses had invested in the country, with an investment volume of $2.9 billion, 31.7 percent higher than in the previous year.

According to Indonesia's trade ministry, the value of the country's exports to China has increased 15 percent since the start of CAFTA.

Pangestu said the free trade agreement has helped to promote trade between the two countries and enabled issues to be overcome in a spirit of cooperation. "What we should do is to translate spirit into concrete actions," she said.

Chinese Premier Wen Jiabao arrived in the Indonesian capital, Jakarta, on a two-day visit on Thursday evening, following his visit to neighboring Malaysia.

The countries have agreed to increase the volume of bilateral trade to $80 billion by 2015. Meanwhile, China will increase investment in Indonesia in fields such as clean energy and electricity generation.

"The agreement between the two governments on expanding bilateral economic and trade cooperation, which was signed on Friday, is something that we've been discussing for two or three years. We hope it will be the mechanism by which we can implement steps that will ensure balanced and sustainable trade," Pangestu said.

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