Chinese Premier Li Keqiang's Visit to Indonesia: Trade & Investment
Chinese Premier Li Keqiang arrived in Indonesia on Sunday (06/05) for a two-day visit. Part of the visit was a meet up with Indonesian President Joko Widodo (at the Presidential Palace in Bogor) to discuss bilateral trade and investment. Key points on the agenda were the strengthening of trade between both nations and enhanced cooperation on infrastructure development projects in Indonesia, including dams and railways.
Keqiang's trip to Indonesia is part of a six-day international visit to Indonesia and Japan. These visits are part of China's efforts to boost trade ties in the region amid a period of rising concern about protectionism. Meanwhile, this year also marks the 5th anniversary of the China-Indonesia comprehensive strategic partnership, a deal that has led to USD $63.3 billion worth of trade between both countries in 2017 (with China controlling the upper hand in the nations trade ties). China is Indonesia's biggest trading partner and therefore a key player. Meanwhile, China was also the third-biggest foreign investor in Indonesia in 2017 with USD $3.36 billion worth of investments, a significant increase from USD $2.66 billion in the preceding year.
After the Indonesia visit, Keqiang is scheduled to leave for Japan on Tuesday for a summit with Japan's Prime Minister Shinzo Abe and South Korea's President Moon Jae-in.
Keqiang stated that he will encourage more Chinese companies to invest in Indonesia, especially for the construction of ports and fish processing sites, as well as the development of coastal economies. Meanwhile, the Chinese premier also vowed to boost palm oil exports from Indonesia to China by at least 500,000 tons. China, the world's second-biggest economy, consumes about 5 million tons of crude palm oil (CPO) every year. Robust demand had already led to rising CPO shipments from Indonesia to China, from3.23 million tons in 2016 to 3.73 million tons in 2017. However, when 500,000 tons are added it would make Indonesia the biggest supplier of CPO to China, surpassing Malaysia.
Besides CPO, China is also set to import more Indonesian tropical fruits, such as mangosteen, dragon fruit, as well as other agricultural crops including coffee and cocoa. In return, Keqiang urges Indonesia to import more Chinese oranges by relaxing Indonesia's import restrictions on this fruit.
Indonesian Foreign Affairs Minister Retno Marsudi added that both countries should cooperate more closely in the field of quarantine for fruits.
What is also interesting to note is that Keqiang vowed he would instruct all Chinese companies that are active in Indonesia to give priority to the hiring of local human resources. These words were in reply to recent concerns among Indonesian workers that rising investment from China would mean a huge influx of unskilled Chinese workers into Indonesia. However, besides several cases of illegal Chinese workers, there are no data that confirm a wave of unskilled Chinese workers into Indonesia.
Thus, for the moment, we conclude that this is merely a hoax created by political opponents of the incumbent government to incite fears and antipathy toward the government ahead of the 2018 and 2019 elections. However, considering different government institutions have different data regarding foreign workers in Indonesia, we do advise the government to come up with undisputed accurate data.
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