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Industrial estates call for incentives to attract Chinese investors
Appealing conditions are needed to encourage the move of Chinese companies to Indonesia in the automotive, electronics, chemical and textile sectors, according to the Industrial Estates Association (HKI).
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This aerial picture taken on May 14, 2023, shows the PT Indonesia Morowali Industrial Park (IMIP), one of the biggest nickel producers in North Konawe, Central Sulawesi. (AFP/Riza Salman)
T
he Industrial Estates Association (HKI) says a suite of incentives is needed to encourage Chinese firms in the automotive, electronics, chemical and textile sectors to build factories to Indonesia.
HKI chairman Sanny Iskandar said there was significant demand for land for the relocation of Chinese factories to Indonesia due to the trade war between the United States and China, which makes it hard for some Chinese firms to export their products to the US.
Countries in the region have been gearing up to accommodate China-based manufacturers that may be looking to set up facilities elsewhere for easier access to the US market in what has been termed the “China plus one” strategy. Vietnam, in particular, has benefited from this.
Read also: No winners in trade wars
Sanny emphasized the need for the government to maintain economic and political stability in Indonesia, as that would eventually affect demand for industrial land from foreign investors.
Several strategies could be pursued to take advantage of Chinese manufacturers keen to expand, Sanny explained, including the enhancement of industrial area infrastructure through the development of smart and ecological industrial estate concepts.
“Classic hurdles we as the developers and managers of industrial areas usually face include the ongoing necessity for government involvement and support regarding the ease of business licensing procedures and legal certainty,” he said on Thursday, as reported by Bisnis.
