Wen Bien Chen, deputy representative for TETO's economic division, said that since the start of the year, 30 Taiwanese companies had begun assessing the possibility of relocating their production plants to Indonesia.

"The country's rapid economic development mostly triggered by domestic consumption attracts Taiwanese entrepreneurs to do their businesses here," he told The Jakarta Post.

Wen said many Taiwanese companies operating in Vietnam and in the coastal areas of China had been facing increasing challenges, particularly from labor costs.

"I've been told by Taiwanese companies operating in Vietnam and China that they are considering relocating their factories here," he said.

Taiwanese shoe manufacturer Pau Chen, for example, was planning to expand its production plant in Sukabumi, West Java, Wen said.

"Pau Chen has about 60,000 to 70,000 workers in Indonesia and is now expanding their production lines in Sukabumi. It will employ more workers for its factories, hopefully exceeding 100,000 people within one year," Wen said, adding that Pau Chen employed about 400,000 workers in China and 50,000 in Vietnam.

He said political and economy stability was the chief concern of most foreign investors, including Taiwanese entrepreneurs, in conducting businesses in a foreign country.

"Our *Taiwanese* entrepreneurs are confident and feel safe to do businesses here," he said, adding that labor costs both in China and Vietnam had climbed quickly over the last two years while Indonesian rates had been stable.

James Chen, director of Taiwan Trade Center for Indonesia, said that apart from maintaining political stability, the Indonesian government had done many good things to stabilize both its interest rate and currency, which were important for foreign investors.

"Stability is a must. Most foreign investors will expand their investment to a country as long as they are confident and feel safe," he told the Post.

In the near future, he said, more leading information and communication technology manufacturers were likely to expand their businesses to Indonesia.

Taiwan, he said, was one of a few countries still committed to encouraging their manufacturers to establish joint ventures with local companies, including in Indonesia.

"We undertake many efforts not only to introduce our good brands to Indonesian customers but also encourage Taiwanese companies to set up their production facilities here," he said.

According to TETO, 2009 trade between Indonesia and Taiwan reached US$8.5 billion, down from $10.85 billion in 2008 due to the global financial downturn. (ebf)

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