A Strategic Partnership
    Category: Issues & Ideas By : Zhiang Song Read : 1197 Date : Thursday, September 05, 2013 - 07:10:15

    Ahmad Zamroni / Forbes Indonesia

    Chinese Ambassador to Indonesia Liu Jianchao, 49, assumed his position last year. Liu, who studied at Oxford, was one of the youngest spokespersons at China's Ministry of Foreign Affairs in 2002 and remained in that position for over six years. His appointment underscores the importance that China attaches to one of the most important bilateral relationships in Asia. The interview took place in the Ambassador's residence near the Embassy.

    Under China's new leadership, what changes should we expect in the Sino-ASEAN relationship, and especially between China and Indonesia?

    Developing relationships with ASEAN countries, including Indonesia, is a vital component of our work with neighboring countries and our foreign policy in general. This is a long-term policy. Following the formation of the new leadership, a new generation of leaders will continue strengthening China's relationship with ASEAN, including Indonesia. The current mechanisms and channels for communication and cooperation will be sustained, and more cooperation will be pursued. Our new Minister of Foreign Affairs Wang Yi has made Southeast Asia his first destination after his inauguration, which proves that China attaches great importance to the region. I am also expecting other Chinese leaders to visit ASEAN later this year.

    China recognizes that Indonesia has a large population, a fast-growing economy, abundant natural resources and great potential. Meanwhile, Indonesia has set for itself ambitious development goals and is gradually reaching these goals through continuous economic growth. In this sense, the strategic element in the Sino-Indonesian partnership will become even more important. This is one of the best moments in the history of the Sino-Indonesian relationship. I believe that the new Chinese leadership will further strengthen this strategic partnership.

    The two economies are becoming more interconnected through trade and investment. What's next for this interconnection?

    The economic relationship between China and Indonesia consists of the following components. The first is trade. The volume of trade is increasing very fast—last year it reached $66 billion. China is currently the largest importer of Indonesian non-oil goods in the world and is Indonesia's second largest trade partner. Amid a weak global economy, trade between China and Indonesia continues to have an annual growth of around 10%.

    The second is investment. The total amount of Chinese investment in Indonesia was not very large a few years ago but is on the rise. It should become more significant in three to five years. Many investment projects are in manufacturing, such as cement and tires. Last year, Sinopec invested $850 million to build an oil storage facility in Batam. We predict that in five to ten years, Chinese investment in Indonesia will see a big increase, and we are working to realize this.

    Project contracting and infrastructure construction are also important issues. Indonesia is implementing its MP3EI project [the Master Plan for Acceleration and Expansion of Indonesia's Economic Development] that is essentially driven by infrastructure construction. The building of infrastructure and power plants is a specialty of Chinese companies, and Chinese banks are willing to finance such projects.