Jakarta (ANTARA News) - Economic observer Farial Anwar said the government has been asked to immediately overcome the entry of Chinese products into Indonesia by issuing new policies, and the situation was one of the impacts of the China-Asean free trade cooperation agreement of January 1, 2010.
"The new policy is expected to deal with the entry of Chinese products into the domestic market, so that not all such products could come into the country," he said in Jakarta Tuesday.
Farial Anwar who is also director of the Currency Management Group said the Chinese products which are mostly cheaper, have become very popular among Indonesian consumers and may set aside the more expensive Indonesian products.
Unless the goverment did nothing about this the impact would be very fatal to the Indonesian economy, like the closure of local producers, he said.
This suation will also affect foreign investment in the country, because foreign investors will turn to other countries.
This will exert pressure on Indonesian exports to the market and imports from other countries will increasingly flow into the country, he said.
If this happens, he added, some time in the future, maybe in the next two years, Indonesian will become an entirely consumer country, with the economy still growing but lack of quality.
Foreign investors will start investing in China and Vietnam rather than in Indonesia, as production basis and export their products to the domestic market.
The government needs to be really ready in implementing the free trade agreement between Asean and China.(*)