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

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power 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.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid