Indonesia: 70% of Foreign Companies Profitable, Invites Chinese Businesses to Expand Investment

The Indonesian government is inviting further investment expansion from China, following a Japan External Trade Organization (JETRO) survey that found 70% of foreign companies operating in Indonesia are profitable. The Coordinating Minister for Economic Affairs expressed a welcoming stance towards investments, particularly in sectors that add value to the national economy. Coordinating Minister Airlangga Hartarto, speaking during a meeting with a Chinese business delegation and the Indonesian Ambassador to China, cited the Japan External Trade Organization (JETRO) survey results, stating, "According to the Japanese agency's report, JETRO, the potential for foreign companies investing in Indonesia to gain profit is large, at 70 percent. So, more are profitable than not." He emphasized that the government is continuously working to create a conducive investment climate through various policies, including competitive fiscal incentives for investors. This effort is expected to boost investment flows and strengthen Indonesia's competitiveness amidst global competition. The economic relationship between Indonesia and China has been developing in recent years, with cooperation extending beyond trade and investment to include industry, digital economy, technology, and education. Both nations have trade agreements such as the ASEAN-China Free Trade Area (ACFTA), effective since 2010, and the Regional Comprehensive Economic Partnership (RCEP), implemented in 2022. Bilateral trade has been increasing, reaching approximately US$154 billion according to Indonesian data and around US$160 billion by Chinese figures. Key Indonesian exports to China include ferroalloy, nickel matte, lignite, coal, and palm oil. China is not only a major trading partner but also one of the largest investors in Indonesia. To encourage greater investment realization, the government offers incentives like tax holidays up to 100%, tax allowances, investment allowances, and super tax deductions for specific sectors. "We are open to cooperating with global partners, including China, in trade, investment, services, and education. I invite entrepreneurs from China to continue investing in Indonesia, especially in sectors with high added value," Hartarto concluded. In education, collaboration includes research and seminars with Tsinghua University held at the Bali Special Economic Zone (KEK). In the automotive sector, the government is promoting investment from Chinese electric vehicle manufacturers like BYD and Chery, which are now among the top five in Indonesia's automotive market share. In the digital economy, opportunities are being opened for investment in semiconductors, fiber optic network construction, digital application development, and data center construction as part of accelerating the national digital economic transformation. The Spokesperson for the Coordinating Ministry for Economic Affairs, Haryo Limanseto, stated that the economic relationship between Indonesia and China is projected to continue growing as cooperation expands across various sectors. "The economic relationship between Indonesia and China continues to show increasingly strong and comprehensive development. The government is committed to continuously opening opportunities and expanding mutually beneficial cooperation, not only in trade and investment but also in strategic sectors such as industry, education, digital economy, and technology," Limanseto said. Source: Liputan6