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

Video Miami Cubans Divided on New US Policy

While older, more conservative Cuban Americans have promoted anti-Castro political movement for years, younger generations say economically, it is time for change More

2014 Sees Dramatic Uptick in Boko Haram Abductions

Militants suspected in latest mass kidnapping of over 100 people in Gumsuri, Nigeria on Sunday More

Video Cuba Deal Is Major Victory for Pope

Role of Francis hailed throughout US, Latin America - though some Cuban-American Catholics have mixed feelings 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.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid