Indoensia Luring Chinese Investors

Chinese factories are moving to a textile park in Indonesia. The area will support several industrial sectors such as automotives, electronics, shoes, textiles, clothing, and petrochemicals. China’s investment, especially in the automotive sector, is growing rapidly. There are two Chinese vehicle factories that are already showing good sales results. China sees Indonesia as a potential production and export base. In addition very large domestic market already exists. In fact, the industry value chain already exists.

China's total investment in Indonesia has a value of 1.07 billion dollars. The money flows into the country through 520 projects. Industries in China are moving from the manufacturing to the service sectors. Moreover, their labor cost is already high enough, so they see potential in moving to Indonesia.

China has been a major export destination for Indonesian commodities, particularly coal and gas. In anticipation of China’s attempts to transition from a growth model based on construction and heavy industry toward greater reliance on consumer spending and services, calls are mounting for Indonesia to take advantage of the change despite the economic turbulence that would occur during the transition period. Indonesia can take advantage of China’s consistent oversupply of processed goods and import them for domestic infrastructure needs.