~Oei Eng Goan

~Oei Eng Goan
The Jakarta Post
Jakarta

Political and economic relations between China and Indonesia have
enjoyed such rapid progress that Chinese Ambassador to Indonesia
Lu Shumin calls it the best period of development following the
resumption of full diplomatic ties in 1990.
Ambassador Lu attributed the solid ties to both sides adopting a
policy of mutual trust and respect, good neighborhood and
comprehensive cooperation, boosted by the support of neighboring
countries in the region.
"So I believe that no matter what happens, our two peoples and
countries are determined to continue friendly ties to achieve
greater goals in the future that benefit the two nations," Lu,
who assumed his ambassadorial post in Indonesia about a year ago,
told The Jakarta Post in a recent interview.
He also praised Jakarta's adherence to the One-China Policy,
which acknowledges and recognizes the People's Republic of China
as the sole representative of the Chinese people and government
and that Taiwan is an integral part of China.
The policy was demonstrated by the Indonesian government when it
officially rejected a visit made by Taiwan's Vice President
Annette Lu to Jakarta last year, as well as a later planned visit
by President Chen Shui-bian in his bid to expand Taiwan's
"southward policy".
"From our point of view, the Chinese government does not oppose
exchanges of people to people and economic ties (between Taiwan
and Indonesia), but we absolutely oppose the official ties
(between Taipei and Jakarta). We truly appreciate the Indonesian
government's adherence to the One-China Policy," he explained.
Although relatively new to Indonesia, Lu said he witnessed the
significant changes the Jakarta government made in moving toward
a more democratic country and in its bid to maintain national
stability and unity, which would eventually help promote regional
peace and stability.
He noted the tremendous changes in the country since the
tumultuous downfall of Soeharto in 1998, which was accompanied by
bloody student demonstrations and mass riots. He recollected the
relative calm that accompanied the passing of legislation in the
House of Representatives (DPR) last year for establishment of
political parties and the general election in 2004.
"Although there were demonstrations and protests, but the number
of protesters was much smaller in scale compared to 1998. This
means that there has been improved stability in Indonesia," he
said.
"Smooth development can only be achieved when there is political
and social stability and Indonesia, (and) especially the
government of President Megawati (Soekarnoputri) has made every
effort to achieve that goal. Even though the country was hit hard
by the economic crisis of 1997-98, Indonesia last year could
still reach economic growth of 3.6 percent, which was not bad.
"So I believe that, thanks to the wisdom and hard work of the
people, Indonesia will overcome this temporary difficulty and
enjoy a better future."
The Chinese ambassador told the Post that bilateral trade had
flourished since the normalization of ties, with nearly US$8
billion recorded last year, and always in Indonesia's favor (see
table).
Lu said economic cooperation could still be stepped because the
economies of the two countries are complementary. Data show that
China's exports to Indonesia include machinery and equipment,
electrical appliances, electronic goods, textiles and
motorcycles, while it imports crude oil, palm oil, paper, pulp
and timber from its Southeast Asian counterpart.
China, with considerable experience in hybrid rice technology,
has sent a number of experts to work with Indonesian companies,
Lu said.
"My understanding is that in some cases and after several years
of experimentation, rice output could be increased from four tons
per hectare to eight tons per hectare. I was told that
(Indonesia's) minister of agriculture has issued a license to
boost cooperation in this field," he said, adding that a number
of Chinese companies producing agricultural machinery and
equipment were working with firms here.
"In terms of financial aid from China, we have offered a grant of
93 billion yuan ($50 million) and we are working with the
Indonesian government on how to use the $400 million commercial
loan which is now underway," he explained.
The Indonesian government's commitment to fight terrorism and
efforts to create national stability have provided assurance to
Chinese businesspeople and investors in examining the country's
potential.
"Of course they would also like to see that the Indonesian
government further improve its legal system and create a better
investment climate."
Other projects undertaken by the two countries include the
construction of urea storage at PT Pupuk Kaltim in East
Kalimantan under a build, leasing and transfer scheme, and a
contract awarded by China to Indonesia in 2002 for the yearly
supply of 2.5 million metric tons of liquefied natural gas to
Fujian province.
Meanwhile, in a separate interview with the general manager of
Bank of China, which began operations in mid-April to help
facilitate the fast growing trade between the two countries, Gao
Jilu told the Post that, despite Indonesia's great potential
market, he would prefer to develop the bank step by step.
He declined to elaborate when asked about the bank's lending
rate, saying only that it would take a conservative approach and
that it had invested $50 million as starting capital in line with
regulations from the central bank.