Experts expect deeper cooperation in manufacturing between China, Indonesia

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04:17

China and Indonesia should increase their cooperation in terms of international supply chain and global production network as their economic structures are complementary, experts have suggested.

The two countries' development strategies have yielded fruitful results since Chinese President Xi Jinping paid a state visit to Indonesia in 2013.

Data from Indonesia showed that trade between China and the southeastern Asian climbed to almost 59 billion US dollars in 2017, up 23 percent from the previous year. Indonesia imported 36 billion US dollars worth of Chinese goods in 2017, while its exports to China grew to 23 billion US dollars.

China and Indonesia have very complementary economic structures, said Zhao Zhongxiu, from the University of International Business and Economics.

01:07

Base metal exports from Indonesia to China grew at a record high of 103 percent, bringing in 2.5 billion US dollars to the country. Mineral products, animal fats and vegetable oils were the top products China purchased from Indonesia last year, supporting Zhao’s words that "Indonesia is rich in natural resources."

The processing trade and manufacturing are not very developed, according to Zhao, who noted that Indonesia has a huge potential in the manufacturing industry, in particular the labor-intensive manufacturing.

Zhao suggested that China should seek more opportunities in manufacturing in Indonesia.

"When we restructure the global value chain and the production network, labor-intensive manufacturing can move to Indonesia – the country has a lot of skilled and young labor forces," Zhao explained.

Chinese Premier Li Keqiang is currently on an official visit to Indonesia. Zhao expressed belief that Li’s visit would accelerate the Jakarta-Bandung railway project, and bring more opportunities for Chinese companies investing in Indonesia.