Indonesia, China Set $33b Business Pact

Chinese President Xi Jinping delivers a speech to the Indonesian parliament in Jakarta on October 3. (EPA/Bagus Indahono)

By : Robertus Wardi & Ezra Sihite | on 10:00 AM October 04, 2013
Category : News, Business, Featured

Chinese President Xi Jinping delivers a speech to the Indonesian parliament in Jakarta on October 3. (EPA/Bagus Indahono) President of China Xi Jinping delivers a speech to the Indonesian parliament in Jakarta on October 3. (EPA/Bagus Indahono)

Indonesian President Susilo Bambang Yudhoyono and Chinese President Xi Jinping on Thursday witnessed the signing of 23 new business agreements valued at almost $33 billion between the two nations, in a luncheon that included several ministers and business leaders from both countries.

“The signing of 23 cooperation agreements opens a deeper relationship between Indonesia and China,” Yudhoyono said in Jakarta, adding that he hoped the partnership would be a boost on economic growth for both countries.

Industry Minister M.S. Hidayat said the total worth of investment from the new agreements could amount to $32.8 billion, in fields of such cooperation as mineral, pulp, property, infrastructure, transportation and many others.

“Both countries have agreed to improve business cooperation in the fields of mineral, pulp and paper and the monorail,” Hidayat said.

Both Indonesia and China have experienced fast growth in their economies in recent years.

China today stands as the second-biggest economy, at $8.2 trillion in 2012, with a population of 1.35 billion people, while Indonesia is home to a population of more than 240 million people with an economy of $946 billion.

Indonesian exports to China in the January-June period totaled $10 billion, or 13.5 percent of total exports, while imports from China amounted to $14 billion. In 2012, total trade between the two countries in 2012 had reached more than $50 billion.

Based on this data, Yudhoyono at the luncheon called on Chinese businessmen to make Indonesia their main source in supporting China’s production activities, Yudhoyono said, adding that Indonesia has potential and provides plenty of opportunities.

“I hope business players from China can see Indonesia as a main resource to fulfill their needs for business development and production,” he said.

According to him, business and cooperation opportunities in Indonesia have further expanded due to the government’s implementation of the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI) in different sectors across Kalimantan, Sumatra, Papua and Nusa Tenggara.

Infrastructure developments such as road construction, bridges, ports and airports have become a priority in the MP3EI, and China could play a part in such efforts, he said.

The president also further emphasized that demand for energy will continue to increase until the year 2030, and that could become a business opportunity for both countries — with cooperation in the energy sector including geothermal and renewable sources.

“In 2030, our energy market is predicted to reach up to $270 billion,” Yudhoyono said.

Additionally, Yudhoyono expressed admiration towards China’s manufacturing sector, which had a labor-intensive start and shifted toward science and technology.

“Indonesia aspires to build a manufacturing sector that is supported by technological and science development by creating job opportunities,” he said.

As such, the two countries could complement each other in achieving a stronger, more sustainable economy, Yudhoyono said.

Thursday’s luncheon, he added, was an important step in building a strategic and comprehensive cooperation between the two countries and that it is through such partnership that the two nations will be able to build cooperations that are based on values of equality, reciprocity, respect, ones that could be of profit to both countries.

About 300 delegates from China and 500 delegates from Indonesia participated in the Indonesia-China Business Luncheon. Xi’s visit to Jakarta came just shortly before he is scheduled to attend the Asia-Pacific Economic Cooperation forum in Nusa Dua, Bali, to be held Sunday through Tuesday.

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