Confidence key to generating high economic growth: Long Yongtu

Confidence key to generating high economic growth: Long Yongtu

China's economy has been growing rapidly over the past several
years and is predicted to be one of the world's giants in the
future. Last week, The Jakarta Post's Dadan Wijaksana had an
interview with Long Yongtu, former chief negotiator for China's
entry into the World Trade Organization (WTO), who is currently
the secretary-general of the Boao Forum for Asia, a forum
designed to strengthen economic cooperation among countries in
the region. He was asked about his views on what Indonesia could
learn from China and the prospects in the relationship between
the two countries.

The following are the excerpts of the interview:

Question: Unlike Indonesia, China has managed to develop its
economy rapidly and gained the confidence of the international
business community, as evident in the huge foreign investment in
the country. In your opinion, what could Indonesia learn from
China?

Answer: I think the focus is to enhance confidence in the country
and also enhance confidence in international business in
Indonesia, because from my experience, confidence is so
important, especially in financial sectors, investment circles
and others to boost investment. There will be no increase in
foreign direct investment (FDI) or domestic investment if there
is no confidence.

But, of course, that confidence building is a very complicated
process. It needs good policies from the government and support
from the people. Equally important is the unity or consensus
building among the general public, because I think we need to
accommodation all people and groups across the country. We also
need to be patient and believe in what's best for the future of
the country.

I think Indonesia is a great country, such a resource-rich
country. The consensus building process should be there.

How would you suggest Indonesia reaches that consensus?

I think the foundation of consensus building is to share one
aim, or one objective. In China, for instance, we focus on
creating high economic growth.

I think there should be a common understanding of what is the
most important for the country, and the most important above all
is, I believe, economic development.

The turning point in China's economy was sharing that view:
that economic development is paramount, so important that we
should not engage in endless debates on other things. So it's a
matter of priorities, how to determine the highest of your
priorities.

In Indonesia, things should be the same. As a developing
country, all people in Indonesia want to get rich, all people
want to be more prosperous. So without economic development, how
can you achieve that goal?

What do you see in the relationship between the two countries in
the future?

I think China and Indonesia can forge a strong partnership,
because of the mutual cooperation and good relations the two
countries enjoy. So, I have full confidence that a closer
relationship can be forged between the two countries in the
future.

We have developed good cooperation in various areas. China is
now quickly becoming the third largest consumer of oil, of which
Indonesia could become one of the suppliers. Indonesia is also a
big producer of rubber, palm oil and chemical products. China
needs a lot of those commodities.

Turning to another issue, there have been rising calls for China
to reconsider its policy on the yuan. Many argue that the yuan is
currently undervalued, making other products from other countries
which have stronger currencies less competitive in the
international market. Your comments on that?

I think, that is a wrong perception.

China's high competitiveness is not based on the so-called
undervalued currency. The competitiveness comes from its
competitiveness in labor cost, a competitive business environment
and rapid economic growth. These make China competitive
especially with its huge market, which attracts a lot of foreign
investment.

This is the basis of China's current competitiveness, not its
(currency's) value. So it would not be fair to ask China to do
that (revaluing yuan). China should make its own decision
regarding the matter.

In Indonesia, we also have relatively competitive labor cost, why
has Indonesia failed to emulate China in this area?

Well, of course, you have to look at it in connection to other
factors, such as the quality of the labor. The quality of labor
in China is good, because every year we produce two million new
university graduates. So the quality of labor is important, and
also a high degree of discipline, as well as productivity.