China's investment may triple in five years: Government

The Jakarta Post, Jakarta

With relations between China and Indonesia growing warmer by the day, the government is upbeat that investment from the world's rising economic superpower to Indonesia will reach US$20 billion within the next five years.

Speaking after a meeting between Minister of Finance Jusuf Anwar and a business delegation from China's Guangdong province, head of the government's infrastructure development financing team Raden Pardede said there has been a "boom" of inquiries from Chinese businesses on possible investment here, since the two countries signed a strategic partnership agreement recently.

"Considering this, the government is seeing the potential that Chinese investments could reach between $10 billion and $20 billion within the next five years," he said on Friday.

"All we have to do, actually, is just respond and facilitate those interests from the Chinese businesses."

Guangdong is among China's richest provinces and the country's main investment destination from neighboring Hongkong and Taiwan. Its Guangzhou capital rivals China's commercial capital of Shanghai in becoming home to the country's major corporations.

The meeting came ahead of President Susilo Bambang Yudhoyono's four-day visit to Beijing on July 13.

The visit, expected to boost trade and investment between Indonesia and China, will be a response to Chinese President Hu Jintao's earlier visit in April to Jakarta for the Asian-African Summit, in which he afterwards signed the strategic partnership agreement.

Data from the Investment Coordinating Board (BKPM) shows that Chinese investment to Indonesia amounted to $6.5 billion as of last year, while bilateral trade between the two countries stood at $13 billion.

Jusuf, meanwhile, recently said that China will add another $200 million on top of the $400 million it had previously committed to help Indonesia finance several infrastructure projects.

Raden added that among the sectors that Chinese business were interested in investing in, were projects such as toll roads and power plants as well as in natural resource sectors, notably in palm plantations and coal mining.

He also explained that the government expects Chinese investors to join hands with local partners in their investment schemes, particularly in infrastructure development projects, to bring further benefit to Indonesia's economy.

"We hope they can cooperate with PT Pelindo in seaport projects or PT Angkasa Pura in airport projects, for example," he said, referring to the state seaport and airport operators, respectively.

In return, the finance ministry's director general of customs and excise Eddy Abdurrachman said the government was ready to give certain incentives to attract more investment from Chinese business, including exempting them from certain custom fees and facilitating use of warehouses in the country's bonded free-trade zones.