News / Asia

Indonesian Trade with China Rises, Despite Fears of Tough Competition

Indonesian union members protesting against a trade agreement with China
Indonesian union members protesting against a trade agreement with China

Multimedia

Brian Padden

When Chinese President Hu Jintao visits Indonesia May 17, the free-trade agreement between China and its neighbors in Southeast Asia will be a major topic of discussion.  Some labor groups in Indonesia want the government to cancel the agreement.  

At a rally in Jakarta, the National Workers Union voices opposition to the free trade agreement between China and the Association of Southeast Asian Nations.  Since the agreement went into effect in January, some textile factories have gone out of business.  

Union leader Baso Rukmana says Indonesian industries must be protected until they receive the training and support needed to compete with China.

"The government is obligated to give protection to its people and that protection should be supported by law," said Baso Rukmana.

Before it went into effect some economists predicted the trade agreement would increase sales of Indonesian commodities such as palm oil, copper, and rubber, but would hurt low-end manufacturers.

But Indonesia's shoe industry contradicts that forecast.  

Footwear sales rose by about 10 percent in the first quarter of this year, with exports to several markets, including China, up.

The head of the Indonesian Footwear Association, Binsar Marpaung, says while comparable for now, China's wages are rising while Indonesia's are more stable.

And he says the Indonesian government is helping factories purchase modern equipment to make them more competitive.

"We cannot say subsidies but we call it machinery restructuring, because as you know the machinery for the shoe is already 20-years-old," said Binsar Marpaung.

China still benefits, because it sells modern machinery to Indonesian manufacturers.  Ping Jian Sheng, director of the Chinese-owned Yi Fan Trading Company, says he is helping a number of Indonesian leather manufacturers modernize.

"There is a good future in selling their equipment here because the Indonesian leather manufacturers are improving," said  Ping Jian Sheng.

Overall, Indonesian exports to China more than doubled from January to March, while imports from China rose by about 50 percent.

Marpaung says the government could do more to help, such as requiring the military and government agencies to purchase domestically made goods. But he says too much help will hinder productivity.

"I should say that is rather contradictory," he said. "If you put a lot of subsidy that means the production is not competitive or not cost efficient."

He says only by engaging China can Indonesia's economy make the changes necessary to compete in the global economy.   

You May Like

Reports of Mass Murder on Mediterranean Smuggler’s Boat

Boat sailed from Libya with 750 migrants aboard and arrived in Italy with 569 More

Video New Thailand Hotline Targets Misbehaving Monks

Officials say move aims to restore country’s image of Buddhism, tarnished by recent high profile scandals such as opulent lifestyle, drug and alcohol abuse, as well as child sex abuse More

Study: Dust from Sahara Helped Form Bahama Islands

What does the Sahara have in common with a Caribbean island? Quite a lot, researchers say More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Astronauts Train in Underwater Labi
X
George Putic
July 25, 2014 7:25 PM
In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid