ASEAN-China trade has silver lining, minister says<\/p>\n
Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
Local industries here are anxious about anticipating in the
\nlaunch of the biggest free trade area between the Southeast Asian
\ngrouping and China, but the government has given its assurance
\nthat it would be beneficial for the country.<\/p>\n
Minister of Trade Mari E. Pangestu acknowledged that the
\ncheaper Chinese products were posing a threat to local producers,
\nespecially the small and medium enterprises (SMEs).<\/p>\n
\"Therefore the government will assist SMEs, through
\npartnership programs, capacity building and providing
\nmicrocredit, in preparation for the free trade area,\" she told
\nThe Jakarta Post.<\/p>\n
Moreover, she said that the government realized that
\nIndonesia's competitiveness would depend heavily on its effort to
\ncurb rampant corruption and red tape, relax the rigid labor law,
\nimprove tax rates and administration, guarantee legal certainty
\nand work on the country's ailing infrastructure.<\/p>\n
Nevertheless, as the bulk of all goods traded would have their
\nimport duties gradually reduced to zero by 2010, the country's
\nmanufacturers still have time, albeit limited, to anticipate the
\nfull impact of ASEAN-China free trade area, she said.<\/p>\n
She went on to say that China was strong, particularly because
\nits manufacturers run in high economies of scale, therefore local
\nproducers should not compete in a head-on fashion.<\/p>\n
According to the minister, the cost of labor in the countries
\nwas actually on a par, but Chinese workers were more productive.
\n\"We must not compete in the low-end consumer goods. We have to
\nproduce higher quality goods aiming at the medium-high segment,\"
\nshe said.<\/p>\n
She said also that the country could and must develop its
\ncompetitiveness, especially because Indonesia had a rich variety
\nof abundant natural resources that China did not have.<\/p>\n
Time might be up for China in enjoying efficiency from tapping
\nstate-of-art technology by dominating the world's foreign direct
\ninvestments, as multinational firms had come to believe that it
\nwas too risky to put all their eggs in China alone.<\/p>\n
\"They will not rely on just one source. They will diversify
\ntheir investments, including (placing them in) Indonesia. We have
\ncompetitive labor, natural resources and don't forget our big
\nmarket,\" she said.<\/p>\n
The Indonesian Chamber of Commerce and Industry (Kadin)'s
\nproduct development and marketing committee head Thomas Darmawan
\nsaid that China was far more ready than Indonesia in embracing
\nASEAN-China FTA.<\/p>\n
\"They have new factories, built in integrated areas, producing
\nlow-end products ready to penetrate the ASEAN market,\" Thomas
\ntold the Post.<\/p>\n
Certain industries would surely fall victim to the trade
\nliberalization drive, although there are areas in which the local
\nprivate sector could actually benefit from in the agreement
\nthrough several ways, he said.<\/p>\n
The country has to lobby and convince Chinese producers to use
\nsemi-processed Indonesian goods, and then keep informing them of
\nthe standards and demands of local consumers to ensure efficient
\ntrade, he said.<\/p>\n
Indonesia has to be ready to facilitate Chinese manufacturers
\nto expand production here.<\/p>\n
\"In order to do so, Indonesia must have a lobby team in China
\nthat moves to convince Chinese industry players. Thailand,
\nMalaysia and Singapore have had such teams for years,\" said
\nThomas, who is also the chairman of the Indonesian Food and
\nBeverages Association (GAPMMI).<\/p>\n
Anton Supit, a top executive at the Indonesian Employers
\nAssociation (Apindo) said that the 2010 liberalization schedule
\nshould provide more than enough time, but only if the government
\nsucceeded in waking up the local private sector.<\/p>\n
\"We have to admit the organization of local industry players
\nis weak. Therefore, we cannot entirely blame the government if we
\nare not ready to enter the trade liberalization era,\" he told the
\nPost.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asean-china-trade-has-silver-lining-minister-says-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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