Mon, 22 Mar 2010

TEMPO Interactive, Jakarta:The Chairperson of the Investment Coordinating Board (BKPM), Gita Wirjawan, has acknowledged that there is an exodus of Indonesian entrepreneurs who have invested in China.

They produced goods in China to be exported to Indonesia.

“There is an indication of this. We do not know the exact figures,” Gita told Tempo, on Thursday (18/3).

Previously, Gita said that investment costs in China were not as cheap as before.

China is no longer competitive because its laborers’ wages are higher than in Indonesia.

But tax facilities and cheap electricity make Chinese products cheaper.

“But China now wants to change its economy from being investment based to consumption based,” said Gita.

The Deputy Chairman of the Indonesian Chamber of Commerce and Industry (KADIN) for the Investment, Informatics, Telecommunication and Tourism Division, Chris Kanter, said that he did not know for sure the number of exodus.

Because, he said these Indonesian entrepreneurs have no obligation to report to KADIN.

“We are not aware of the numbers in detail,” said Chris who is also a Commissioner at PT Indosat.

Chris explained that Indonesian entrepreneurs were withdrawing their investments from China more because of the matter of laborers’ wages.

They are then looking for other investment regions, especially countries which are aggressively looking for investment such as India and Vietnam.

“But we also heard that some of them return to Indonesia,” added Chris.

Previously, Minister of Trade Mari Elka Pangestu said that several Indonesian entrepreneurs were withdrawing their investments from China because the country is no longer considered competitive.

“Because the Yuan has strengthened and regional minimum wages are two times more expensive,” she said in the national seminar “Competitiveness Increase and UKM (home industries) readiness in Facing ACFTA” at Atmajaya University, on Wednesday (17/3).