RI-China seal multibillion deal to strengthen trade

Rendi A. Witular, The Jakarta Post, Jakarta

Indonesia, the nation with the world's largest Muslim population, has signed bilateral agreements with the world's biggest communist country, China, to promote trade between them worth billions of dollars.

The deals mark a significant improvement in relations between the two nations since the downfall of the authoritarian Soeharto regime in 1998. Soeharto, who seized power in 1965, cut diplomatic ties with China in 1967.

Monday's agreements were designed to strengthen the strategic partnership between Indonesia and China, focusing on politics, security, trade, investment and social affairs.

The agreements were signed by President Susilo Bambang Yudhoyono and visiting Chinese President Hu Jintao. Hu is in Jakarta for a two-day state visit after attending the Asian- African Summit last week.

"The agreements mark a new historic milestone in our relations. The meeting with President Hu was very productive with concrete results that can be followed up at the ministerial level," Susilo said in a joint press briefing with Hu.

Susilo and Hu expected that the agreements would pave the way for both countries to expand bilateral trade to reach US$20 billion over the next three years, from the current $14 billion.

Hu described the meeting with Susilo as "successful", saying both countries would explore possible cooperation in other fields to strengthen the influence of the two nations within the region.

"China and Indonesia have the opportunity to develop together and seek solutions to settle challenges faced by the two countries in the international arena," he said.

Hu said Susilo had agreed to accept his invitation to visit China in the immediate future.

Aside from the partnership agreements, both countries also signed Memorandum of Understandings (MOU) on maritime cooperation, infrastructure and natural resources cooperation, a $30 million grant for economic and technical cooperation, and a joint Indonesia-China project for the construction of a friendship village for tsunami victims in Nanggroe Aceh Darussalam and Nias.

In addition to this, both countries have also signed agreements on visa exemptions for holders of diplomatic and service passports, and an agreement on cooperation between Indonesia's Meteorology and Geophysics Agency (BMG) and China's earthquake administration in relation to earthquake and tsunami disasters.

China has also pledged some $300 million in preferential buyer credit to assist reconstruction works in tsunami-stricken Aceh and Nias.

China has also disbursed some $1.5 million in financial aid, as well as $500,000 worth of logistical aid, to help tsunami victims.

For Indonesia, which is rich in natural resources, the agreements are part of an effort to take advantage of China's booming economy, as well as to build a future regional alliance in the defense and security sectors.

"Although we have yet to seal any concrete agreement on defense and security this time, we have agreed that there will be training for military officers between the two nations, as well as joint military training," said Susilo.

As for China, the world's most populous nation, closer relations with Southeast Asia's largest economy is seen as a crucial step to help fuel its economic growth and to accentuate its regional dominance as the world's next superpower.