RI, China agree to step up economic ties

RI, China agree to step up economic ties

Fabiola Desy Unidjaja, The Jakarta Post, Jakarta

China and Indonesia signed several agreements on Wednesday,
including one on the reopening of a branch of the Bank of China
in the country in a bid to further boost economic cooperation
between the two countries.

Visiting Chinese Premier Zhu Rongji and President Megawati
Soekarnoputri witnessed the signing of six economic agreements at
Merdeka Palace, following bilateral talks between the two
delegations.

Besides the reopening of the Bank of China branch, the
agreements also covered, among other things, avoidance of double
taxation, cultural cooperation and agricultural cooperation.

The two governments also agreed to expand cooperation in
tourism to make Indonesia one of the main tourist designations
for Chinese citizens.

China also pledged some 40 million renmimbi (US$5.7 million)
as a grant for infrastructure development in Indonesia, including
the construction of highways and railroads in the province of
Aceh.

Zhu, the first Chinese premier to visit Indonesia in the past
11 years, said at a joint press conference that Beijing fully
supported the Indonesian government in resolving the various
problems and challenges currently faced by the Indonesian nation
and people.

"China will always support the Indonesian government's efforts
to maintain its territorial integrity, sovereignty and national
unity and to accelerate its economic recovery," Zhu said through
an interpreter.

"We are very pleased with the remarkable achievement in Sino-
Indonesian relations," he noted, adding that he had very open
discussions with Megawati concerning a number of international
issues which the two countries had a common interest in.

Megawati said both China and Indonesia, which have enjoyed
"long and friendly" relations, would continue to strengthen
bilateral cooperation in the field of economics and politics.

Indonesia resumed full diplomatic ties with China in 1990,
after Jakarta suspended relations in 1967 following the abortive
coup allegedly launched by the Indonesian Communist Party. The
then Jakarta government accused Beijing of complicity in the
coup. China had denied it.

Since the resumption of relations, bilateral trade has
steadily increased with a trade surplus in Indonesia's favor.
Last year trade between the two countries reached $7.5 billion,
with China in deficit by $800 million, according to Chinese
officials.

China imports mainly crude oil, palm oil and logs from
Indonesia while exporting mainly electronic appliances and
motorcycles to Indonesia.

Bilateral trade in the first quarter of this year stood at
$775.7 million with China in deficit of around $50 million,
according to data from the Indonesian Central Bureau of
Statistics.

The premier's visit is expected to yield many benefits for the
two countries, especially in the economic field as China is a
vast market for Indonesian goods.

The two leaders also witnessed the signing of an agreement
by the central bank governors of the two countries on the
reopening of the Bank of China, which was closed in 1967.

The first branch of the bank will be in Jakarta, Bank
Indonesia Governor Sjahril Sabirin said after the signing.

Separately, State Secretary/Cabinet Secretary Bambang Kesowo
told journalists the two heads of government also discussed the
possibility of investing in the oil and gas sectors.

"Indonesia offered the Pangguh LNG field in Irian Jaya, while
China offered participation on its oil field in Guangzhou, a
booming southern Chinese province.

Bambang further said the two countries also discussed ways of
further boosting trade cooperation in the coming years.

Zhu, who led a big delegation comprising ministers and
journalists, arrived on Wednesday morning at the Halim
Perdanakusuma Airport. He was given a full military honors at the
welcome ceremony at the Merdeka Palace with a 19-gun salute.

In the evening, Megawati hosted a state banquet to honor the
Chinese premier and his entourage.

Zhu is slated to meet People's Consultative Assembly Speaker
Amien Rais and House of Representative Speaker Akbar Tandjung on
Thursday.

On Friday morning Zhu will leave for the historic Javanese
city of Yogyakarta, where he will visit the world famous Buddhist
temple of Borobudur before flying to the resort island of Bali.

The premier and his entourage will leave for Beijing on
Sunday.