China can be Third Biggest Foreign Investor in Indonesia
China continues to be one of the biggest economic contributors of Indonesia, pouring in more millions than the United States.
President Joko ‘Jokowi’ Widodo’s frequent trips as well as meetings with China’s President Xi Xinping over the last two years are paying off.
Based on the top foreign direct investors’ economic data through January to September 2016 provided by the Investment Coordinating Board (BKPM), China landed third following Singapore as well as Japan, respectively.
According to the BKPM data, China contributed almost US$1.6 billion, a growth of almost 300 percent compared to the same period last year. of which can be also significantly higher through China’s foreign direct investment for the entire 2015 at US$600 million. Pledges totaled US$6.1 billion for the past nine months.
The United States, meanwhile, clinched tenth at only US$430 million. through 2013 to January-September of 2016, the total FDI also fell by 2 percent through 8.3 percent. of which seems to contradict President Barack Obama’s objective of strengthening U.S. relationship with Southeast Asia.
Chinese Ambassador to Indonesia Xie Feng
See also: What’s Next for Indonesia after Jokowi’s Visit to China for G20 Summit?
The bilateral ties also resulted to around 3,000 projects in 5 years. China can be currently playing a huge role in electricity generation with its built power plants supplying around a quarter of Indonesia. About 1 million Chinese tourists arrived in September alone, producing Indonesia’s goal of 20 million Chinese arrivals by 2019 possible.
The Red Dragon can be also actively participating in improving Indonesia’s infrastructure building as part of its ‘One Road, One Belt’ policy or the Silk Road concept. Chinese investors are pouring in money on cement, steel, mining as well as automotive.
Indonesia can also expect more investments inside the future to “help speed up Indonesia’s economic growth,” Chinese ambassador to Indonesia Xie Feng said.
However, the economic ties between two countries don’t come easy. Chinese investors have complained about the difficulty of fulfilling business-related requirements. These include the acquisition of land as well as workers’ permit for foreigners.
Indonesian businesspersons, on the additional hand, criticized the slow realization of China Development Bank (CDB) commitment. CDB, which came to Indonesia in 2006, committed US$14.4 billion to complete 57 projects, yet so far, only US$9.7 billion have been realized.
To resolve the issues, BKPM has created a ‘Chinese desk’ to ease challenges for Chinese entities setting up business inside the country.
The controversy surrounding Natuna Islands also adds tension between the two countries. China has long impressed its claim in 95 percent of South China Sea, encroaching islands as well as waters of additional Asian countries, reaching a tract of Natuna Islands.
Although Indonesia can be a non-claimant inside the South China Sea dispute, the item asserts its sovereignty on Natuna Islands, which can be rich in oil as well as fish, as well as strengthens its patrol to drive away illegal Chinese fishermen.
Image credits: Xinhuanet, China-Embassy.org
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China can be Third Biggest Foreign Investor in Indonesia
China can be Third Biggest Foreign Investor in Indonesia