General

This year marks the tenth anniversary of the establishment of a comprehensive strategic partnership between China and Indonesia. At the beginning of the new year, the pragmatic cooperation between the two countries ushered in good news one after another. According to Huacheng Import and Export Data Observation, recently, the State Council approved the establishment of the China-Indonesia Economic and Trade Innovation and Development Demonstration Park. On February 22, the fourth meeting of the Joint Committee on China-Indonesia Bilateral Cooperation was held in Jakarta.

The two sides agreed that under the strategic blueprint of the two heads of state, China and Indonesia have deeply dovetailed their development strategies, worked together to cope with risks and challenges, and the new pattern of political, economic, cultural and maritime "four-wheel drive" cooperation has continued to deepen, setting a model of shared destiny, unity and self-reliance, and solidarity and cooperation for developing countries.

According to the results of this meeting and the consensus reached by both parties, the two sides will deepen the strategic docking, accelerate the construction of the "the Belt and Road" cooperation flagship projects such as Ya'an-Wan'an High speed Railway, and ensure that they are completed and opened to traffic on schedule. We will continue to promote the construction of key projects such as the "Regional Comprehensive Economic Corridor" and the "Two Countries, Two Parks", and create a new benchmark for high-quality joint construction of the "the Belt and Road". The two sides will continue to improve the level of economic, trade and investment cooperation and expand cooperation in various fields.

Jointly build the "the Belt and Road"

Promote fruitful economic and trade results

China and Indonesia are good neighbors, friends and partners across the sea. In recent years, with the comprehensive connection between the "the Belt and Road" initiative and Indonesia's concept of "global maritime fulcrum", China Indonesia economic and trade cooperation has achieved fruitful results.

In a recent interview, Indonesian Ambassador to China Zhou Haoli said that the bilateral trade volume in 2022 would reach 149.4 billion US dollars, an increase of 20.16% over the previous year. China has become Indonesia's largest trading partner for 10 consecutive years. At the 5th China International Import Expo, the bird's nest, coffee, palm oil, tropical fruit, etc. brought by Indonesian enterprises were once again popular with Chinese consumers.

Investment cooperation is also a highlight of China-Indonesia economic and trade cooperation. In recent years, the investment of Chinese-funded enterprises has involved a wide range of fields in Indonesia, such as agriculture, mining and metallurgy, power, real estate, manufacturing, industrial parks, digital economy, etc. The steady implementation of a large number of projects has not only absorbed a large number of Indonesian labor employment, but also helped to transform the economic structure of Indonesia. Zhou Haoli said that in 2022, the mainland of China ranked the second largest investor in Indonesia with an investment of US $8.2 billion, with a year-on-year increase of 156.25%.

According to the consensus reached at the fourth meeting of the China-Indonesia Joint Committee on Bilateral Cooperation, China is willing to further expand the import of Indonesian bulk commodities and high-quality agricultural and fishery products according to market needs, encourage Chinese enterprises to invest in Indonesia, expand cooperation in infrastructure, green development, digital economy, medical and health care and other fields, create highlights of maritime cooperation, and promote the resumption of fishery cooperation.

Indonesia is also an important partner in jointly building the "the Belt and Road". Ya'an Wanzhou High speed Railway is a landmark project of high-quality joint construction of the "the Belt and Road" between China and Indonesia. It is also a vivid portrayal of China, together with neighboring countries, adhering to the principle of joint consultation, joint construction and sharing, and deepening mutually beneficial and win-win cooperation. As the first high-speed railway between Indonesia and Southeast Asia, the Jakarta High-speed Railway connects Jakarta, the capital of Indonesia, and Bandung, the capital of West Java. After the completion and opening to traffic, the travel time from Jakarta to Bandung will be reduced from more than 3 hours to 40 minutes, which not only effectively alleviates the traffic pressure along the line from Jakarta to Bandung, creates convenient and fast travel conditions for local people, but also helps optimize the local investment environment, drives the commercial development and tourism development along the line, and speeds up the formation of the high-speed rail economic corridor, Huacheng Import and Export Data Observation Report.

Usher in more new opportunities under the RCEP framework

China and Indonesia are both major developing countries and important emerging economies. The industry generally believes that the economic and trade cooperation between China and Indonesia is highly complementary and the cooperation space is broad. With the entry into force of the Regional Comprehensive Economic Partnership Agreement (RCEP) for Indonesia in January this year, economic and trade cooperation between China and Indonesia will usher in more development opportunities.

Zhang Jianping, deputy director of the Academic Committee of the Research Institute of the Ministry of Commerce, analyzed in an interview with the reporter of the International Business Daily that Indonesia is the largest economy with the largest population and the largest economic aggregate in ASEAN, and is also the first place to initiate the 21st Century Maritime Silk Road. China and Indonesia have strong economic complementarity and great potential for economic and trade cooperation, especially China's strong competitiveness in technology-intensive and capital-intensive products, and Indonesia has comparative advantages in resource-intensive and labor-intensive products. Under the RCEP framework, China and Indonesia and other ASEAN countries should give play to their complementary advantages, increase intraregional trade and promote mutual investment, so as to further promote their respective economic and employment growth.

In terms of specific fields, Zhang Jianping said that Indonesia's energy and resource products, such as palm oil and coal, are huge bulk commodities exported to China, and other agricultural and forestry products, mineral products, and labor-intensive products such as textiles and clothing, bags, shoes and hats are also exported to China. China's comparative advantage to Indonesia is mainly reflected in the export of mechanical and electrical products and industrial manufactured products. For example, there are many engineering projects in Indonesia's power station construction undertaken by Chinese enterprises, and the large equipment and related products supporting these projects need to be imported from China in large quantities.

"China and Indonesia have also carried out large-scale international production capacity cooperation, and Chinese enterprises have continuously increased their investment in Indonesia, thus making the cooperation between China and Indonesia on the global supply chain value chain closer," Zhang Jianping said.

Zhang Jianping also said that the policy dividend of RCEP, especially the rules of origin accumulation, is conducive to the members to play their comparative advantages in the global value chain and carry out closer cooperation. With the implementation of RCEP in Indonesia, Indonesia will take this opportunity to participate more fully in the regional division of labor in the large market of RCEP, so as to improve its export capacity and commodity competitiveness. At the same time, RCEP will further release the potential of trade and investment cooperation between China and Indonesia.