Engaging China's southern powerhouse

Yuliana Bahar ,  Guangzhou   |  Mon, 09/22/2008 12:40 PM  |  Opinion

Guangdong's secretary of the Communist Party Committee (CPC), Wang Yang, recently led a large delegation to Indonesia comprising provincial officials and top Guangdong corporate executives.

Both President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla cordially accepted the delegation and, in doing so, made a very good decision because secretary Wang is not just a party secretary of the CPC, and Guangdong is not just any province in mainland China.

In China, a party secretary always stands above any executive power. At a provincial level, a governor may be the provincial chief executive officer, but any decisions must be supervised and approved by the local party secretary.

While in most Chinese provinces the party secretary position is at a ministerial level, in Guangdong and some other powerful provinces the party secretary is at a vice premier level. For this reason, Wang Yang has also been entitled to become a member of the Political Bureau of the CPC Central Committee.

Wang is also Chinese president Hu Jintao's protege, and has been projected by many to return to Beijing as one of theSix" when the leadership of Hu Jintao and Wen Jiaobao comes to end in few years time.

Due to complex rivalry between CPC's two current leading factionsthe Tuanpai faction (those who have established their political path through the CPC Youth League, as have Hu and Wang) and the Shanghai Bang (those within the party who affiliate with former president Jiang Zemin) - Wang may not be prepared by Hu as the future president or prime minister.

However, he will be most likely become one of the six members of the Standing Committee of the CPC Central Committee, the highest authority that decides the country's strategic policies in internal and external affairs.

By accepting Wang's courtesy call, our President and Vice President have been very strategic in efforts to secure our country's interests toward China for the pre-sent and particularly for the future.

It also shows that we understand the strategic importance of Wang as CPC secretary for Guangdong and as one of the members of the Political Bureau of the CPC Central Committee, the institution which stands directly under the Standing Committee of CPC Central Committee.

Guangdong has become China's economic powerhouse a decade after Deng Xiaoping's successful experiment of economic reform began in South China. With its leading industrial capacity scattered in Shenzhen, Dongguan and Guangzhou, most of China's exports to the world, such as IT and electronics, electrical machinery, toys, textiles and garments, come from this province.

Being the richest province for the last two decades has also made Guangdong the highest tax contributor to Beijing. With its economic capacity alone, it is regarded as a strong political force by the central government.

This is why many party elites manage to get a positions in Guangdong as a means to secure higher posts in Beijing. It is also why many top party elites in Beijing have deployed proteges to assume posts in Guangdong, to win this province's support at a state level - as in the case of Hu and Wang.

Guangdong has attached great importance to Indonesia as reflected by Wang's decision to make Indonesia the first foreign country he visited after assuming the party secretary position.

Last year, the volume of trade between Indonesia and Guangdong increased 33 percent, reaching US$5.2 billion (20 percent of the total volume of Indonesia-China trade in 2007) allowing Guangdong to remain the Chinese province with the largest trade volume with Indonesia (as it has been for the last decade).

With a value of $2.7 billion, its imports from Indonesia also increased 16 percent and accounted for 22 percent of China's total imports from Indonesia.

According to statistics from the Guangdong province Department of Foreign Trade and Economic Cooperation (DOFTEC), in 2007 the value of investment by Indonesian companies in Guangdong increased more than 400 percent from $1.9 billion in 2006 to $9.7 billion.

Unfortunately, however, Guangdong's actual investment value in Indonesia is only $45 million, or 2.4 percent of Guangdong's total investment abroad which reached $1.85 billion in 2007.

When accepting Wang's visit, one of the important points raised by President Yudhoyono was a task assigned to the Trade Minister to increase trade volume between Indonesia and China through Guangdong to US$10 billion in just three years.

What needs to be followed up is to supply Guangdong more.

Guangdong is a province whose economic power re-lies heavily on imported energy resources and proces-sing (manufacture) industry. A supply of oil, gas, coal and iron from Indonesia will be one of Guangdong's main priorities.

On the investment side, more hard work needs to be done. Guangdong's investment in Indonesia can be further increased. The $461 million worth of investment contracts made by Guangdong businessmen with partners in Indonesia as a re-sult of last week's "2008 Chi-na (Guangdong) - Indonesia Business & Investment Forum" made the case.

For the foreseeable future, the investment potential from Guangdong is in its labor intensive industries such as furniture, textiles and garments. The provincial government's emphasis on capital and technology-intensive industries and the increasing labor wages have pushed Guangdong's labor-intensive industries to relocate outside the province.

However, we should also attract investments from Guangdong's capital and technology intensive industries.

The writer is an Indonesian diplomat in Guangzhou. The views expressed in this piece are her personal opinion.

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