ASEAN KEY DESTINATIONS
Govt targets 30 percent increase in Chinese investment
The government aims to grab as much as US$30.07 billion of direct investment commitments from China this year, an increase of over 30 percent from 2015, as it aggressively approaches potential investors from the Asian powerhouse.
Investment Coordinating Board (BKPM) chief Franky Sibarani said on Monday that Chinese direct investment to the country had been on the rise and that his office aimed to net a lot more in years ahead.
“We aim to get $30.07 billion in direct investment commitments from China this year,” he said.
China, the world’s second largest economy, has placed Indonesia as its second largest investment destination, after the US.
Chinese outward investments during the 2010-2015 period hit $219.9 billion, with around $23 billion going to Indonesia, according to data from the Financial Times.
The figure excluded investments in financial and oil upstream industries.
Franky said his office aimed to reap $30.07 billion in investment commitments from China this year, 32.5 percent up from $22.7 billion last year.
In a bid to achieve the target, the BKPM visited three major cities in China between January and March this year to directly approach potential investors. The office successfully secured around $10.8 billion worth of investment commitments from Shanghai, Beijing and Huzhou.
Franky said China’s 10 largest provinces by gross domestic product, namely Guangdong, Jiangsu, Shandong, Zhejiang, Henan, Hebei, Liaoning, Sichuan, Hubei and Hunan, were listed as the main targets for new investments in the country.
“However, we’ll also handle investment commitments from other provinces that are also economically active and approach us,” he said.
Most Chinese investments in Indonesia are poured into the metals, building materials, renewable energy, rubber and electronic components industries.
Franky said that while an exact calculation on the ratio between commitment and realized investments was not available, he was confident that Chinese realized investment would be on the rise this year, particularly with the establishment of a China desk at his office, which is set to launch on April 1.
The desk, which will employ Chinese-speaking staff including two to three Chinese Embassy employees, is expected to help Chinese investors in dealing with issues such as slow responses to land inquiries and language barriers.
In addition, BKPM deregulation director Yusliot said the BKPM had also made progress on improving the country’s ranking in the World Bank’s Ease of Doing Business (EODB) survey by revising a number of regulations.
“We’ve so far completed 26 out of 37 regulations needed to improve our ease of doing business,” he said.
Yusliot said his office expected that another 11 regulations would be completed by March or April.
Among the deregulation measures that have been carried out are slashing procedures to start businesses from 13 to three steps and cutting the application period to obtain construction permits from 201 days to 25.
President Joko “Jokowi” Widodo has set an ambitious target for his administration to move from 109th position in the up the EODB 2016 survey to 40th in 2017.
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