China’s Sichuan province signs deals with Indonesia to strengthen trade

These agreements, according to Chinese Communist Party secretary for Sichuan, will fortify the relationship between Indonesia and China.

Yvette Tanamal

Yvette Tanamal

The Jakarta Post

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Several trade agreements are signed at the Sichuan-Indonesia Trade Conference in Jakarta on 29 May 2023.(The Jakarta Post /Yvette Tanamal)

May 31, 2023

JAKARTA – Seeking to strengthen economic, trade and people-to-people relationships, China’s Sichuan province has signed agreements with Indonesian businesses, noting that the two countries share great potential to expand on some of their most crucial sectors including infrastructure, agriculture and renewable energy.

Eight agreements centering on coal, lithium hydroxide, lithium carbonate, herbicides, konjac rice, coconut products, logistics and a green plant-protection project were endorsed during the Sichuan-Indonesia Economic and Trade Conference in Jakarta on Monday.

These agreements, according to Chinese Communist Party secretary for Sichuan, Wang Xiaohui, will hopefully fortify the relationship between Indonesia and China, which has so far enjoyed mutually beneficial and “solid” collaboration.

Sichuan director general for trade Xi Yixin said that the province, with its population of 89 million and fast technological advancements, had a lot to offer Indonesia.

“Under the China-Indonesia Regional Comprehensive Economic Partnership [RCEP], we have agreed on a zero-tax agreement commitment for 700 trades. We hope that Indonesian investors will take advantage of this large market,” said Xi.

Indonesia, with its improving economy, rich natural resources and a vision for its downstream industry, has much to learn from China, said Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan during the event.

“We used to export only raw materials, but we have begun to stop doing that. […] In the case of steel, for example, I’d like to streamline the process of production, involving micro and small enterprises [MSEs] to start producing forks, spoons, scissors, surgical tools and other items,” Luhut said.

“We will need an ecosystem to make this happen, and we’ve learned from China in this. We do not plan to build factories only.”

Many other materials, including fiberglass, are also been set to be downstreamed, Luhut added, as part of Indonesia’s goal to become a high-income industrial country by 2045.

China is Indonesia’s third-largest investor, accounting for 30.8 percent of investments, while also taking the top spot for Jakarta’s trading partner at 59.8 percent, according to the latest data from the Office of the Coordinating Maritime Affairs and Investment Minister.

Chinese Ambassador to Indonesia Lu Kang said Sichuan and Indonesia shared many strategic similarities, including good geographical location, rich natural resources, experience in dealing with natural disasters and development, as well as a mutual understanding of partnership.

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