Chinese business groups eye more investments in RI

Sari P. Setiogi, The Jakarta Post, Jakarta

Chinese businesspeople are seeking investment opportunities in Indonesia's oil and gas and infrastructure sectors, touting their experience and advanced technology.

"After more than 20 years, we have (accumulated) experience in the oil and gas and infrastructure sectors. It makes us good in technology," Chen Jian, assistant to China's Minister of Commerce, said in his opening remarks at the China-Indonesia Engineering and Technology Business Forum (CIEBTF) on Monday.

Jian praised Indonesia for its "good labor," abundant natural resources and huge potential market.

He said China had a huge demand for oil and gas and the country still imported the commodity to fulfill its needs.

Several of China's oil and gas companies have been operating in Indonesia for several years, including state-owned giant China National Offshore Oil Cooperation (CNOOC). Earlier, CNOOC confirmed that it was eyeing bigger opportunities here.

Separately, CIEBTF deputy chairman Heroe Wiedjatmiko touted Chinese technology, saying it was a match for Western technology, but cheaper by 30 percent to 40 percent.

During the forum, several Chinese businesspeople raised questions on the prospect of doing business in Indonesia and other aspects, including bank interest rates and "illegal" taxation.

Head of the Chinese section of the Indonesian Chamber of Commerce and Industry (Kadin) Sharif C. Sutardjo explained that bank interest rate in Indonesia now stood at 18 percent per year, much higher than 5 percent in China.

He also said "unauthorized taxation" could reach 12 percent of product value.

He noted that in order to attract Chinese businessmen, who are now aggressively looking for investment opportunities overseas, Indonesia should work hard to improve its business climate.

"We must offer points of competitiveness, such as high productivity and efficiency," said Sharif.

Describing how aggressive Chinese businessmen were moving into Indonesia, Sharif said China accounted for about 50 percent of bidders who had participated in Indonesia's recent tender for oil and gas contracts.

As of 2002, total investment by China in Indonesia reached US$ 434.2 million, with 199 projects.

Director general of international trade at the Ministry of Industry and Trade Pos M. Hutabarat told The Jakarta Post that the Chinese government had provided US$400 million in concessional loans to Indonesia for 15 years to fund several infrastructure projects.

Some $150 million of the loans is being used to develop the 200 Megawatt (MW) Labuhan Angin power plant project in Sibolga, North Sumatra.

Indonesia is proposing to use the remaining funds for the Suramadu bridge to connect Surabaya, East Java, to the island of Madura, and double-tracking of the railway linking Cirebon in West Java to Kroya, Cilacap, Central Java.

According to Pos, the Indonesian government recently asked for an additional loan of $70 million from China, but the latter had yet to make any response.