China expo aims to lure fresh investments

Zakki P. Hakim, The Jakarta Post, Jakarta

A four-day Chinese trade exhibition here starting on Thursday will promote China-made goods in the country and lure new investment from the giant economy, trade officials say.

The expo, to be held at the Jakarta International Exhibition Center in Kemayoran, Central Jakarta, is jointly organized by the Beijing-based China Council for the Promotion of International Trade (CCPIT) and the Jakarta-based Association of Indonesia- China Economic, Social and Cultural Cooperation (LIC). Trade minister Mari Pangestu will inaugurate the event.

LIC vice president Mohammad Taha said the exhibition was primarily aimed at encouraging Chinese firms to bring their businesses here or start joint ventures with local industries.

"They are looking for business partners, starting with potential importers or sole distributors for their products," Taha said on Tuesday.

He said that transaction values during the event could reach tens of millions of dollars. The exhibition was expected to become a starting point for numerous new joint ventures and direct investment worth hundreds of millions of dollars here, Taha said.

CCPIT president director Li Zhi Xue said that at least 60 Chinese trading and manufacturing companies were expected to participate in the event, some 60 percent of which were small and medium-sized enterprises.

"They are here looking for business partners," Li said.

Despite the enthusiasm, Chinese businesses had been discouraged by the long and complicated process of opening businesses in Indonesia. However, they welcomed recent statements from the new government that it would simplify and cut back on investment bureaucracy, he said.

Boilers, cables, electronics, tires, automotive parts, paper products, seasonal foods, building materials and rubber goods will be among commodities displayed at the exhibition.

Most companies participating in the expo come from the Zhong Qing, Xi Zhuan and An Hui provinces in the southwest of China. These areas were best-known for their advanced technology-based manufacturing sectors, Li said. Chinese rocket technology was based in Xi Zhuan, he said.

LIC president Sukamdani S. Gitosardjono said in a recent visit to China, a senior official told him small and medium businesses in the country had about US$30 million ready to be invested abroad.

"We should take advantage of this opportunity; a way to recover from the 1997 monetary crisis," he said.

According to the Ministry of Trade, total trade between Indonesia and China last year including oil and gas reached $10.2 billion, in which Indonesia enjoyed a surplus of more than $1 billion.

Indonesia's top-five export products to China last year were oil and gas commodities, wood and wood panels, pulp and paper, organics and chemicals.

China's top-three exports to Indonesia were machinery, electronic goods (final and intermediate commodities) and chemical products.

The previous government has targeted a 50 percent increase in trade between the two countries to reach at least $15 billion this year.

Investment approvals from China

Year Project Value (US$ million)
1997 6 23.5
1998 6 7.6
1999 15 57.9
2000 43 154.3
2001 34 6,054.8
2002 41 58.8
2003 47 254.4
2004* 20 15.6

Source: Investment Coordinating Board (BKPM)

Note:

1. Excluding oil and gas, banking and financial institutions, insurance and leasing, mining in terms of contracts of work, coal mining in terms of agreement of work, and investments in which licenses were issued by technical agencies. 2. Total investment approvals = new project + expansion + change of status * Tentative data, includes only approvals issued by regions received by the Investment Coordinating Board until Sept. 30.