Guangdong seeks better economic ties with Indonesia

Bambang Nurbianto, The Jakarta Post/Guangzhou, China

As a follow-up to healthier business ties between Indonesia and China, some 500 businesspeople from Guangdong province, China, will sign a series of documents on investment during their visit to Indonesia later this month.

"We have prepared several documents to be signed during the visit. However, I can't disclose the details now," Guangdong administration's deputy director-general of the department of foreign affairs and economic cooperation Zhu Ze Nam told Indonesian journalists visiting Guangzhou recently.

Although no details were available, the province is likely to offer its manufactured products of electronic goods, information technology (IT), telecommunication networks, heavy equipment and household products. On the other side, Indonesia will offer its energy resources for the province.

Guangdong -- located in the southernmost part of China -- accounts for 30 percent of China-Indonesia bilateral trade of US$13.2 billion, or $3.96 billion. Indonesia enjoyed a trade surplus last year, with total exports at $2.1 billion and imports at $1.1 billion.

With a total size of 231,000 square kilometers, the province has served as the leading hub for China to open up its economy to the outside world since 1978.

With a population of 83 million, recorded in 2004, the province's income per capita is $3,000 -- 20 times higher than the average for all of China in 1978 when the country launched its economic reform.

Wen Beiyan, a professor at the Institute of the Southeast Asian Studies of Guangzhou-based Jinan University, said Indonesia and Guangdong had a great opportunity to boost economic cooperation due to various reasons.

Guangdong was among China's strongest provinces in terms of economy, with its gross domestic product exceeding $150 billion in this year's first 10 months, reported Xinhua news agency.

Although the province has advanced industrial products, it lacks natural resources. Therefore, Indonesian businesspeople have an opportunity to export commodities like oil, natural gas and coal as well as other raw materials.

"Guangdong uses a lot of coal. So far, the supplies come from provinces in the northern part of China," said Wen.

"Transportation expenses would actually be cheaper for Guangdong to import coal from Indonesia as the distance is shorter," he added.

The increasing prosperity of Guangdong's citizens in recent years has given them the means to travel to other countries. Data from the province's tourism board shows there were 1.71 million Guangdong residents traveling abroad last year.

"From that number, only 60,000 of them visited Indonesia last year. Meanwhile, some 200,000 Indonesians came to Guangdong in the same period. Therefore, both parties should intensify its promotion in tourism," Wen said.

Director of the Institute of Southeast Asian studies of Jinan University, Cao Yunhua said the Association of the Southeast Asian Nations (ASEAN) is the fifth largest trading partner of Guangdong province with the total trade of $9.27 trillion.

He said Indonesia was fifth among the 10 ASEAN members after the Philippines, Malaysia, Singapore and Thailand. But he was quick to add that trade volume between Guangdong and Indonesia would increase, following the likely increasing imports of raw materials and energy resources from the latter.