I

ndonesia aims to attract more investment from China in a bid to reduce an annual trade deficit of more than US$10 billion with the Asian colossus, targeting healthier bilateral economic relations, a minister has said.

Trade Minister Thomas Lembong said on Thursday on the sidelines of the 23rd Asia-Pacific Economic Cooperation (APEC) summit in Manila that Indonesia aimed to have a balanced bilateral relationship with China.

'€œThere are two ways to [balance relations]: The first is to have a healthy trade balance and the second is to attract investment from China to offset our trade deficit with that country,'€ he said.

Indonesia'€™s trade deficit with China has been surging in recent years, ballooning from $4.7 billion in
2010 to $13.02 billion last year. In the first eight months of this year alone, the trade deficit hit $9.2 billion, according to data from the Trade Ministry.

Thomas explained that China had warmly welcomed Indonesia'€™s initiative and conveyed its willingness to invest more in Indonesia.

'€œThey are very supportive, although it will probably be us that have to work harder to offer potential projects in which they can invest,'€ he said.

China'€™s investment in Indonesia hit $160.27 million in the January-June period of this year, a far cry from US investment of $611.87 million during the same period, Investment Coordinating Board (BKPM) data has shown.

Chinese investors are involved in a handful of projects in the country, including the planned construction of medium-speed train connecting Jakarta to Surabaya, as well as a number of power plant projects.

Sofjan Wanandi, chairman of the vice-presidential advisory team, said that during a meeting with Vice President Jusuf Kalla on the last day of the APEC summit on Thursday, Chinese President Xi Jinping had welcomed Indonesia'€™s request.

'€œWe'€™re now lobbying China to import more of our products and invest more in Indonesia,'€ Sofjan said.

Indonesia and China have also agreed to renew a currency swap arrangement to raise caps on the use of rupiah and renminbi for export-import activities between the two countries.

As part of an attempt to reduce dependence on the US dollar, President Joko '€œJokowi'€ Widodo recently said China had agreed to a $5 billion liquidity support related to the bilateral currency swap agreement (BCSA), in addition to a previous $15 billion commitment. Under the agreement, Indonesia and China agreed to use yuan instead of dollars in trade and other areas.

In a separate development, Thomas said that Indonesia would also welcome more investment from the US; tensions between the US and China are running high, with US leader Barack Obama condemning Chinese expansionism in the South China Sea during the ongoing APEC Summit in Manila.

Thomas said that in a bilateral meeting with Indonesia during the APEC summit, US delegates had reinstated their intention to invest around $61 billion in the next seven years. In the last seven years, American foreign direct investment (FDI) in Indonesia has amounted to $65 billion.

According to Thomas, the US also praised Indonesia'€™s efforts to deregulate and rationalize regulations in six economic policy packages announced over the past two months.

The Trade Ministry alone is set to deregulate and rationalize a total of 32 ministerial regulations this year as part of the government'€™s first economic policy package.