Indonesia’s deficit with China decreasing

After being flooded with Chinese products in recent years, Indonesia is now seeing a continuously declining trade deficit with China because of increasing exports to the country.

The trade deficit with China was US$228.5 million in September, the Central Statistics Agency (BPS) said in its monthly report released Monday.

Indonesia’s exports to China totaled $1.09 billion in September, compared with imports valued at $1.32 billion, the BPS report said.

“Our trade deficit with China has been steadily decreasing thanks to improved [Indonesian] exports to the country,” BPS chief Rusman Heriawan told a press conference.

BPS recorded Indonesian exports to China were $1.24 billion in August against imports of $1.93 billion, resulting in a $685 million trade deficit. Indonesia has consistently suffered from deficits in its trade with China, Rusman said.

During the first nine months of 2010, Indonesia’s exports to China reached $9.31 billion, while imports totalled $14.21 billion, amounting in a $4.91 billion trade imbalance favoring China. “We have seen growing imports from China, although the growth is rather flat and thus narrowing our trade deficit,” Rusman said.

Indonesia still endured trade deficits with other countries, such as Thailand ($2.58 billion), Australia ($1.23 billion) and Singapore ($470 million), Rusman added.

“In some cases we are still less competitive than Thailand,” he said, pointing out that Indonesia had a huge dependence on Thai horticulture products. Rusman maintained that despite the ongoing trade deficit with China, Indonesia was still able to maintain its overall trade surplus.

In the first nine months of this year, Indonesian exports reached $110.81 billion, while imports totalled $97.27 billion, resulting in a $13.54 billion trade surplus. Non-oil and gas products were the main contributors.

Unfortunately, Indonesia still suffers from an oil and gas deficit worth $453.1 million. Indonesia booked a crude oil trade surplus of $1.14 billion, but suffered a fuel deficit worth $10.30 billion. The $8.7 billion liquefied natural gas surplus slightly narrowed the deficit.