Some cry over cheaper Chinese goods...
Zakki P. Hakim, The Jakarta Post, Jakarta
Local consumers certainly enjoy the influx of cheaper products. With the cost of living constantly going skyward, finding affordable clothing, electronics and even motorcycles is a relief.
Consumers may be happy, but it is a different story for local traders and manufacturers of all sizes, whether small, medium or large.
Textile retailer Rusdy Said, 29, suffered losses of approximately Rp 600 million (about US$63,000) last year due to the influx of cheaper Chinese textile products.
Rusdy is a retailer in Tanah Abang, Central Jakarta, the region's largest textile market.
The market, which is home to 7,500 kiosks owned by some 4,700 traders, turned over Rp 15 trillion a year, until a fire burned it down in February 2003.
"Early last year, I bought local brocaded fabric at Rp 11,000 per meter. Then, Chinese fabrics entered and sold for Rp 7,000 per meter. Later on, frantic local traders started selling their products at Rp 5,000 per meter. How can I make a profit, let alone survive?" said Rusdy, who runs a family business that was started in the late 1960s.
According to Rusdy, the Chinese products penetrated Tanah Abang after 2003's fire, most of which were smuggled into the country.
"Almost 60 percent of textile products now sold in Tanah Abang are from China," said Rusdy, who was forced to lay off 10 of his 20 employees to cut costs.
He went on to say that many traders now chose to relabel imported Chinese products for export to Africa.
He is unsure whether his business would survive at all -- the same worry voiced by thousands of fellow traders in the market.
The treasurer of the Association of Indonesian Traditional Market Retailers (APPSI), Hasan Basri, said that the government should protect small manufacturers from cheap Chinese products.
"The influx of Chinese products eventually resulted in job losses," he said.
Hasan said that today only 15 percent of small manufacturers have survived in the once famous Cibaduyut footwear center on the outskirts of Bandung. The remaining 85 percent have gone bankrupt thanks to cheap shoes from China, he said.
He added that small textile factories in Pekalongan were also now on the brink of destruction. Today's trend is that traders with strong networks in China make their orders in that country, as production costs were far cheaper there, he said.
Cheaper production apparently allowed the Chinese to produce more variety in their end products. Hasan said in the Tanah Abang market a certain model of local brassiere came in six colors, while the Chinese bras came in up to 12 colors, providing more choice for customers.
Needless to say, customers chose the cheaper one, or the one that suited their color preference, he said.
Furthermore, Hasan said he had been informed that several local craftsmen had been hired to work in China with better rewards and facilities.
"The Chinese will learn from the craftsmen. It is only a matter of time before the Chinese can make Indonesian handicrafts including unique woodcrafts and even batik by themselves, at far cheaper prices," he said.
He blamed globalization for the influx of cheaper goods, but said the government should have been better prepared in facing the phenomenon and in providing assistance to the private sector.
"For China, globalization is beneficial. But for us, globalization means the world is having us for breakfast," he said.