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Thu, 01 Sep 2005

JP/RI-China seals $20b of trade, investment deals

RI-China seals $20b of trade, investment deals

Rendi A. Witular, The Jakarta Post, Beijing

Indonesia and China have signed transactions and investment deals worth US$20 billion on Wednesday as part of efforts by the two nations to triple bilateral trade to US$30 billion over the next five years.

The signing of six memorandums of understanding (MOUs) and four agreements between Indonesian state enterprises and their Chinese counterparts as well as the private sector were witnessed by visiting Vice President Jusuf Kalla

"There is now a good opportunity for Chinese businessmen to invest in Indonesia due to our favorable and competitive exchange rate. You (businessmen) can now buy land and invest in machinery cheaper than before," he said.

The Vice President also said that his visit to China was not "to seek charity".

"We appreciate Chinese businessmen for long involvement in Indonesia. I am here now to do business with you, not to seek charity," he said before a gathering of Chinese and Indonesian businessmen in a seminar to promote trade and investment opportunities in Indonesia.

According to official from the Office of the State Minister of State Enterprises, Aris Mufti, the multibillion dollar transactions and investments will be carried out over the next 15 and 20 years.

Kalla also held a one-on-one meeting with executives from the Export Import Bank of China (EXIM Bank), the China Petroleum and Chemical Corp. (Sinopec), the China Development Bank (CBD), the Huadian Corporation, the China National Offshore Oil Corporation (CNOOC), the China Road and Bridge Corporation (CRBC), the China National Petroleum Corporation (CNPC), the Golden Concord Holdings Limited, the China International Trust and Investment Corp. (CITIC) and the ZTE Corporation.

The VP's shortened trip -- due to the weakening rupiah against the U.S. dollar -- followed in the steps of a visit by President Susilo Bambang Yudhoyono in July. During that visit, Susilo signed investment deals worth a total of $9 billion, in MOUs and agreements, with the Chinese government and private sector.

Aris told The Jakarta Post that the total amount in investment and transactions for all the deals signed by both Susilo and Kalla were estimated to reach some $40 billion over the next 20 years.

Indonesia badly needs foreign technology and capital to develop its natural resources, while China, with more than US$710 billion in foreign exchange reserves, has been shopping around the world to secure stable sources of raw materials.

MOU and agreements signed in China

1. MOU between PT Perusahaan Gas Negara (PGN) and CNOOC SES Ltd. for project cooperation in developing gas a transmission pipeline linking East Kalimantan and Central Java.
2. Technical and business agreement between PT Inti, Alcatel Shanghai Bell and PT Alcatel Indonesia on telecommunication products and for the development of Eastern Indonesian telecommunication infrastructure.
3. MOU between PT Krakatau Steel, PT Sumbergas Sakti Prima, Chengda Chuan Wei Group Co. Ltd., and Sinchuan Chuan Wei Group Co. Ltd. for the development of an iron ore mine in Kalimantan.
4. MOU between PT Antam and Aluminum Corporation of China Limited for a smelter grade alumina project.
5. MOU between PT Jamsostek, PT Transpacific Securindo and Hualing Group Company Ltd on investment cooperation in the medical sector in Indonesia.
6. MOU between PT Jamsostek, PT Transpacific Securindo and Hualing Group Company Ltd. on investment cooperation in housing development in Indonesia.
7. Cooperation agreement between PT Sumber Alam Sultra and Si Chuan Guo Hao Zhong Ye Co. Ltd. on the development of hybrid rice seeds.
8. Cooperation agreement between Artha Graha Networks Associates and Guangcai Energy Company Ltd. on the development of Riau Islands province.
9. MOU between Indonesian and Chinese governments for a feasibility study into the development of the Indonesian sugar industry towards sugar self-sufficiency by 2009.
10. Contract agreement between PT Dizamatra Powerindo and China National Electric Cable & Wire Import-Export Cooperation for the Sibayak Geothermal Power plant in North Sumatra.