ASEAN KEY DESTINATIONS
Eyes on Asian powerhouse as China expands investments in RI
The government has set its sights on boosting Chinese investment in Indonesia by setting up a special desk designated to handle investors from the Asian powerhouse, just as the world’s second largest economy is expanding its footing overseas.
The Investment Coordinating Board (BKPM) announced Monday it would soon establish a “China desk”, on par with special desks for Asian giants Japan and South Korea that have been set up previously.
The desk, which will employ Chinese-speaking staff including two to three Chinese Embassy employees, is expected to address issues that have hindered potential Chinese investors, such as slow responses on land inquiries and language barriers.
“With the presence of the desk, we want to increase investment realization from China,” BKPM head Franky Sibarani told reporters on the sidelines of a China-Hong Kong investor forum. “The rapid growth of Chinese investment in Indonesia, as well as intensive communication between investors and the government, require assistance from those familiar with the Chinese language.”
Investment realization from the world’s second largest country into Indonesia is on the rise, with 14 percent of investment interests being realized last year, from 7 percent per year during 2010 to 2014.
Investment commitments also doubled to $22 billion last year, from an average of $11.3 billion per year in the five-year period ending 2014. Hong Kong, an autonomous territory that belongs to China, also recorded an increase in investment commitment to Indonesia to $3 billion in 2015, from an average of $2 billion per year from 2010 to 2014.
The trend is in line with Chinese companies’ drive toward global expansion to widen their market outreach beyond their home country, which has seen economic growth slowdown to levels unseen in a quarter of a century.
“It is, therefore, our responsibility to provide support so that the investment commitments are realized,” said Franky.
Chinese Ambassador to Indonesia Xie Feng said in his opening remarks during the investor forum that Indonesia was a priority destination for Chinese companies and that most Chinese investors put high hopes on the administration of Joko “Jokowi” Widodo.
“Less than two years after his inauguration, I think we have seen changes. We hope for more changes in years ahead,” he said.
The government has issued 10 economic stimulus packages since September last year to reform the country’s red-tape issues, including by speeding up permit processing to three hours for companies that invest more than Rp 100 billion and employ 1,000 local workers. The facility had attracted five Chinese investors with investment value of $2.34 billion by mid-February.
“Although the world economy continues to slow down, the economy of Indonesia has continued to obtain impressive performance over the last few years. Its growth potential is tremendous,” said Zhang Min, chairman of the China Chamber of Commerce in Indonesia.
A local arm of Chinese tire giant Shandong O’Green Group, PT Eastern Ogreen, has said it is investing $501 million to build a tire plant in Indonesia as the country provides raw materials and lower export tariffs to its main markets in Europe and the US.
Eastern Ogreen project coordinator Fitri Zenitia said her firm would also benefit from a niche market in Indonesia as it specialized in truck and bus tires.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below