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Indonesia wary of Chinese steel product flooding local market


October 26, 2008

Indonesia wary of Chinese steel product flooding local market
Indonesian fears over possible diversion of Chinese products into the country following a financial crisis in the US have now been proven true, reported national news agency Antara.

"We have been flooded by cheap steel products from China making our steel industries unable to compete. One steel plant in Semarang has been closed down," industry minister Fahmi Idris was quoted as saying Friday.

The minister said other industries that he feared could also collapse were textile and textile product industries because their main markets were the United States and Europe.

He said several countries that had been affected by low textile demand from the United States and Europe had already started seeking market alternatives and Indonesia had become one of their targets.

Fahmi said some of the Indonesian textile and textile product industries had stopped or reduced their production due to the low demand from the US and Europe although the quality of Indonesian textiles was number one.

In view of the condition the minister said the government planned to close several ports whose inspection was lax for fear of being used as an access for illegal goods.

The ministry`s secretary general, Agus Tjahjana, meanwhile said the industrial sectors that were affected by current global financial crisis must be the ones that exported their products to the US and Europe.

"The industries that are affected must be the ones that conduct direct exports to the US and Europe while effect on the others may vary," he said.

When asked about the extent of the damage the crisis might cause on the country`s industries he said "it is already enough for the US to just cough to make other countries ill so you could imagine what the impact on other countries would be when that country fell ill."

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