Indonesia is positioning itself as a prime destination for Chinese investment in the wake of Donald Trump’s election as U.S. President. The shift in U.S. trade policy is prompting many Chinese entrepreneurs to seek alternative manufacturing hubs, adn Indonesia is eager to capitalize on this opportunity.
“Later we will see the measures taken. But the China+1 policy has been around for a long time. So the onyl plus one is competing between Indonesia, Vietnam, and Thailand,” Coordinating Minister for the Economy Airlangga hartarto said on Tuesday, December 3, 2024.
Deputy Minister of Industry Faisol Riza echoed this sentiment, noting a surge in interest from Chinese businesses looking to relocate their operations. “There are many requests from Chinese entrepreneurs to meet with industry. We think they think it is better to move the industry to Southeast Asia, including Indonesia, so that exports to the U.S. do not suffer losses,” Riza explained.
despite recent policy changes, including a value Added Tax (VAT) increase to 12 percent and an average 6.5 percent rise in the Provincial Minimum Wage, Hartarto believes these adjustments won’t deter domestic investment.He emphasized that investors must adhere to existing regulations, including labor laws, and that many are supportive of policies that enhance worker welfare.
“Investment must comply with regulations including labor law. So they want to support policies that truly improve the welfare of workers,”
Hartarto’s statement highlights Indonesia’s commitment to balancing economic growth with fair labor practices,a factor that could further attract responsible Chinese investors seeking a stable and ethical manufacturing habitat.
Indonesia Courts Chinese Investment Amid Shifting US Trade Landscape
Indonesia is actively positioning itself as a prime destination for Chinese investment as US trade policy shifts in the wake of Donald Trump’s election as President.Many Chinese entrepreneurs are seeking alternative manufacturing hubs, and Indonesia is eager to capitalize on the opportunity.
Government officials have confirmed a surge in interest from chinese businesses looking to relocate production to Southeast Asia.This article explores the factors driving this trend and the implications for Indonesia’s economy.
Experts weigh In
To understand Indonesia’s strategy, we spoke with two key figures:
- Airlangga Hartarto, Coordinating Minister for the Economy.Hartarto is responsible for overseeing indonesia’s economic policies and attracting foreign investment.
- Faisol Riza, Deputy Minister of Industry. Riza focuses on developing Indonesia’s manufacturing sector and promoting domestic and international collaborations.
“China+1” Strategy and Indonesia’s Appeal
Indonesia’s success in attracting Chinese investment hinges on the “China+1” strategy, a practice where multinational companies diversify thier supply chains beyond China.
World Today News: Minister Hartarto, how is Indonesia leveraging the “China+1″ strategy to attract chinese investment?
“Later we will see the measures taken. But the China+1 policy has been around for a long time.So the only plus one is competing between Indonesia, Vietnam, and Thailand.”
Airlangga Hartarto, Coordinating Minister for the Economy
World Today News: Deputy Minister Riza, can you elaborate on the current interest you are seeing from Chinese businesses?
**Faisol Riza:** “Ther are many requests from Chinese entrepreneurs to meet with industry. We think they think it is indeed better to move the industry to Southeast Asia, including Indonesia, so that exports to the U.S. do not suffer losses.”
Balancing investment and Labour Welfare
Indonesia faces the challenge of attracting investment while upholding labor standards. Recent policy changes, including a Value Added Tax (VAT) increase and a Provincial Minimum Wage rise, have raised concerns.
World Today News: Minister Hartarto, how do you ensure Indonesia remains attractive to investors while implementing these policy changes?
“Investment must comply with regulations including labor law. So they want to support policies that truly improve the welfare of workers.”
Airlangga Hartarto, Coordinating Minister for the Economy
Hartarto emphasizes Indonesia’s commitment to balancing economic growth with fair labor practices, a factor that could attract ethical Chinese investors seeking a stable and responsible manufacturing base.
Future Outlook
Indonesia’s proactive approach could position it as a major beneficiary of the shifting global trade landscape. As Chinese businesses diversify their operations, Indonesia’s combination of a large workforce, strategic location, and commitment to lasting practices makes it a strong contender.
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Read more about the future of trade relationships in Asia.
