Govt vows to curb influx of cheap Chinese goods

JAKARTA (JP): The government said on Tuesday it would find ways to curb the influx of cheap Chinese goods, saying their presence has severely undermined local industries.

Minister of Industry and Trade Luhut Pandjaitan said that the government would soon start evaluating whether the imports of the cheap Chinese products complied with existing trade regulations.

He suspects dumping practices, or even smuggling activities, are responsible for the flood of inexpensive Chinese products that are sold at prices that are much lower than local products.

"They (China) may have efficient industries, but if products are priced less than half of ours, then there must be something wrong here," Luhut told reporters after opening an exhibition of farming machines.

Cheap Chinese products have flooded domestic markets since late last year and have since threatened various local industries such as the footwear industry, the electronics industry and manufacturers of farm machinery.

Luhut said that the government is considering measures to prevent the flood of imports without harming relationships with China.

He said that what worries him most is the danger of more unemployment due to the large amount of cheap imports.

"This problem is a direct concern for laborers," he explained.

According to the Indonesian Footwear Association (Aprisindo), between 5,000 to 6,000 workers could soon be laid off every month if the government fails to prevent imports of illegal footwear.

Aprisindo has estimated one dismissal per firm each time the company reduces daily production by three pairs of shoes or five pairs of sandals.

Dozens of labor-intensive footwear industries have already reduced productions levels, due to large inflows of low priced footwear in major cities like Jakarta, Surabaya and Medan, North Sumatra, the association said.

Aprisindo reported it had reached $580 million in exports during the first six months of this year compared to $1.7 billion throughout all of last year.

Aprisindo has set a target of $2 billion in export sales this year. (bkm)