China unsure about RI's business climate

JAKARTA (JP): Chinese businessmen consider that Indonesia's trade and investment regulations have not been promoted well enough, making them unsure about the country's business climate.

Chen Yu, chief editor of the leading China International Merchant magazine, said promotion was an important aspect which Indonesia must not disregard, because the country possessed a wealth of attractive business opportunities.

"Indonesia has many commodities that the Chinese are interested in such as plywood, pulp and rubber," Chen, as quoted by Antara, said in Beijing.

Chen added that apart from its commodities, Indonesia was also a potential market for Chinese products.

"But the problem is that Chinese businessmen don't have a clear picture of Indonesia's existing business world and trade and investment regulations," Chen said.

For this reason, he said, the Indonesian government should try harder to promote its economic policies.

Chen's suggestion was backed by figures provided by Indonesia's Ambassador to China, Juwana, who said that Indonesian businessmen were investing more in China than their Chinese counterparts were doing in Indonesia.

Although in China alone, Indonesia's investments during the first three quarters of last year reached US$89.42 million -- less than the $184 million of Chinese investments in Indonesia -- statistics showed that Indonesians last year invested a total of $3 billion in Hong Kong and China.

"In general, the figures are encouraging, because Indonesia gains a surplus over China ... But Hong Kong statistics say that our total investment in Hong Kong and China reaches $3 billion, which indicates a deficit on our side," Juwana said.

Juwana asked Chinese businessmen to offset the deficit by increasing their investments in Indonesia.

He pointed out that the two countries had their own economic advantages, which were complementary to each other.

Chinese businessmen will benefit from investing in Indonesia because Indonesia is geographically close to China and because the two -- being Asian countries -- had many social and cultural similarities, Juwana said.

Increase

Since Indonesia and China re-opened diplomatic relations in 1990, trade between the two has increased from $1.17 billion in 1990 to $3.49 billion in 1995. This is less than 2 percent of China's total international trade volume of $280 billion last year.

China presently has an annual economic growth of 12 percent.

Annual trade growth between China and Indonesia in the last six years has increased at an average of 13.45 percent.

According to China's statistics, Indonesia has always enjoyed a trade surplus with China during that period. In 1990, the trade surplus reached $424 million and in 1992, it reached $1.08 billion -- the highest recorded.

Indonesia's exports to China -- which consist mainly of crude oil, wood products, paper, cooking oil, fats and rubber -- have also been increasing at an average rate of 10.16 percent a year. Exports in 1990 were seen at $803.24 million in 1990, but reached $2.05 billion last year.

Meanwhile, Indonesia's imports from China, which increased at an average of 17.31 percent during the 1990-1995 period, went up from $329 million in 1990 to $1.42 billion in 1995. Imports include cotton, vegetables and metal.

In the last five years, imports of zinc and steam boilers alone rose sharply by 125 percent and 394 percent, respectively. (pwn)