From high speed rail to e-commerce, Sino-Indonesian cooperation flourishes
JAKARTA – On Jan 8, 2019 just after the New Year holiday, dozens of students from the Nurul Falah Leles primary school at a remote village of Indonesia’s West Java province gathered at the playground and were looking eagerly at the sky.
During noon time, a drone carrying school bags, books, footballs and other stuff flew from afar and landed steadily on the ground. The children burst into laughter and cheering.
This was a test drone delivery flight cooperated between the Indonesian government and JD.com, Inc., a well-known Chinese internet enterprise. The successful first flight has proven JD’s mature delivery technologies, and boosted the Indonesian government’s confidence in expanding cooperation with Chinese technology companies to use drones to deliver goods to people living in remote areas or on islands.
The brand-new delivery solution is a miniature of high-tech cooperation between China and Indonesia. In recent years, as cooperative projects under China’s Belt and Road Initiative continues to flourish, bilateral trade between the two countries have been upgraded, and cooperation areas been expanded.
According to data from the Chinese Embassy in Indonesia, bilateral trade between China and Indonesia reached $77.4 billion in 2018, making a historic high, and China has been Indonesia’s biggest trade partner for eight consecutive years.
At the same time, China has been increasing imports of various Indonesian products including palm oil and tropical fruits, and exporting high-tech products and electromechanical equipment which are mostly needed by the Indonesian market. Thus Indonesia’s trade deficit to China has been further decreased, and the bilateral trade structure has become more balanced.
From 2013 to 2018, China’s FDI rose from $0.3 billion to $2.4 billion annually, jumping from the 12th to the 3rd in Indonesia’s foreign investment source list. In the first half of this year alone, China’s direct investment to Indonesia reached 2.29 billion dollars, close to last year’s whole-year investment.
Besides in trade and commerce, infrastructure, energy, project contracting and other traditional sectors, the Chinese enterprises’ investment in Indonesia has also been shifting to newly-emerged industries such as technology transfer, industrial manufacturing, personnel training, finance innovation and digital economy.
The Jakarta-Bandung high speed rail (HSR) project, invested and built by a joint venture consortium of Chinese and Indonesian state-owned firms and equipped with Chinese technologies, standard and facility, is the first high-speed railway in Indonesia as well as in Southeast Asia. Once finished, the railway will shorten the travel time between the two cities to about 40 minutes from over three hours, and form a HSR economic corridor along the way.
Indonesian President Joko Widodo hailed the project, saying “the increasing mobility of people and products will lead us to win competition among nations.”
In 2017, China’s SAIC-GM-Wuling Automobile (SGMW) and Dongfeng Sokon built their respective factories in Indonesia. In this September, Wuling Indonesia started to export its product — Chevrolet Captiva to Thailand, Brunei and Fiji.
Beside the SGMW plant in Cikarang, Indonesia, a diary factory invested by China’s Mengniu Diary Company Limited with $50 million, completed construction and started production last November, offering more than 1,000 jobs to local people and selling its products throughout Southeast Asia.
Indonesia’s high internet access has also attracted successful Chinese e-commerce companies to invest and do business online in the island country. In August 2017, Alibaba Group invested in Indonesia’s largest e-commerce platform Tokopedia, and built the Indonesian version of “Taobao”. JD.com and Tencent Holdings Limited also invested in Indonesia, making it the largest e-commerce market in Southeast Asia, offering Indonesian customers competitive products and services, as well as bringing development opportunities for 60 million Indonesian SMEs.
Chinese enterprises in Indonesia have also been paying attention to fostering local talents and employing local people. Huawei Technologies Co., Ltd. has been providing various kinds of skill training to over 12,000 engineers and 3,000 students in Indonesia since 2000. Zhejiang Rock Soil Base Company has also been training over a hundred Indonesian heavy-machine operators for diggers, pile engines and drilling machines.
Saryadi Guyatno, a senior official at the Ministry of Education and Culture, said the Indonesian government hopes more Chinese enterprises could work under the partnership with Indonesian vocational schools and colleges to foster more local talents, so as to let the enterprises and the Indonesian society to grow together.
According to Wang Liping, economic and commercial minister counselor at the Chinese embassy in Indonesia, the economic cooperation between China and Indonesia in recent years has been based on mutually beneficial and win-win, thus flourishing in all areas and bearing many fruits.
As the new round of technological revolution is underway, new economic activities, such as e-commerce, big data, cloud computing, AI, mobile payment and others, are creating new room for future cooperation between China and Indonesia, he added.