Indonesia’s wooing of China investors pays off
INDONESIA’S wooing of China seems to have paid off as Chinese investments continue to perch on the list of top-five realised foreign direct investments (FDI) this year.
Indonesia-China economic relations are getting warmer, a trend not seen in previous years.
According to the latest data from Indonesia’s Investment Coordinating Board (BKPM), the realised investments from mainland China and Hong Kong hovered in third and fourth place in the January-to-September period, whereas a year ago, Hong Kong only sat in ninth place and the mainland in 10th.
Since taking office in October 2014, President Joko “Jokowi” Widodo has stepped up his administration’s attempt to court China into making various business deals in the archipelago.
In less than two years, Jokowi has met five times with Chinese President Xi Jinping.
He has also held a string of meetings with Chinese businesspeople, with one of the most notable being Jack Ma, the chairman of the Chinese online marketplace Alibaba Group Holding. Jokowi even made Ma an adviser to Indonesia’s e-commerce steering committee.
The efforts have not stopped at meetings.
The BKPM has created a special desk as well to facilitate Chinese investors. The Chinese desk offers online services using mobile application platforms WeChat and WhatsApp to assist with the investment-application process and provide investment regulation updates in the Chinese language.
The results have been satisfactory. By the end of September, mainland China was already working on 1,205 projects, worth US$1.6 billion (Bt56 billion), while Hong Kong was working on 758 projects, also worth $1.6 billion.
In total, the amount of FDI stood at 295.2 trillion rupiah (Bt793 billion), equal to almost 77 per cent of the full-year target of 386.4 trillion rupiah.
Singapore remains Indonesia’s top foreign investor and the steel and mineral processing industries remain the most preferred sectors of foreign investors.
China, in particular, has most of its investments parked in the steel and mineral processing sectors, with smelters in Sulawesi included as part of its investment. One example is Virtue Dragon Nickel Industry, which processes ferronickel in Konawe, Southeast Sulawesi province.
