Jokowi Selects Central Java and Batam to Hold Relocation of Chinese Industry

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JAKARTA, presidentpost – Maritime Affairs Coordinating Minister Luhut Binsar Pandjaitan said the government was preparing two locations to accommodate industries relocating from China. The two regions are Central Java and Batam.

Luhut said the trade war between the United States (US) and China made the investment climate in the bamboo curtain country not conducive. With the increase in US import duties on imported Chinese products, all real investment projects, there cannot freely export.

As a result, companies in China will relocate their production facilities to other countries so that their exports can still be competitive. One of the countries that are considered by these companies in Indonesia.

“The president has agreed that there will be two places that we will prepare. One in Central Java and one may be on the surrounding island in the Batam area there,” Luhut explained, Thursday (30/5).

Luhut is optimistic that there will be many companies that relocate their production facilities from China to Indonesia as the tension of the trade war becomes increasingly fierce.

A trade war between the US and China entered a new round this month after the US raised China’s import duty tariffs from 10 percent to 25 percent for imports worth US$ 200 million.

Luhut hopes that investments transferred to Indonesia include electronic products such as smartphones, computers, and various other sophisticated devices. “We want it in part, what percentage can relocate here,” he said.

Later, the relocation of Chinese companies to Indonesia will be “matched up” with US-based companies to then become joint ventures.
In this way, Luhut wants to make Indonesia asylum for the US and Chinese companies who are not willing to be victims of the trade war between the two governments.

According to him, Indonesia can promise to facilitate export access for these companies to non-traditional countries. This because Indonesia already has a free trade agreement with Australia and East African countries such as Mozambique and Kenya.

Luhut hopes that the preparation for relocation achieved in less than a year. This relocation, he continued, was in line with the wishes of President Joko Widodo.

“They agreed to make Indonesia one of the destinations for their relocation. Not only Indonesia but also those who want to go to Vietnam, Thailand, to Malaysia. So, in the next year, we must move quickly,” he concluded.