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Jakarta Post

China shrugs off labor influx into RI

  • Anton Hermansyah

    The Jakarta Post

Jakarta   /   Mon, May 2, 2016   /  06:45 pm
China shrugs off labor influx into RI President Joko "Jokowi" Widodo called late last month for more labor-intensive projects to improve the purchasing power of people. (Antara/Rosa Panggabean)

China has denied that investments in many mega projects in Indonesia will result in a massive influx of Chinese workers, saying that Chinese workers' wages are higher than those of local workers.

Indonesia has seen an increasing amount of investment from the world No. 2 economy.

In the first quarter of this year, realized investment skyrocketed to US$ 464.6 million, a whopping 518.6 percent of the US$ 75.1 million year-on-year. The investment accounts for 6 percent of the combined investment realization of $7.29 billion in the first quarter, placing China in fourth position after Singapore, Japan and Hong Kong.

"They [Chinese-backed projects] will not use Chinese labors since the costs to employ them is eightfold compared to the local workers. If the company is rational they might not want to employ those Chinese workers," said Wang Liping, Chinese Embassy Minister Counselor for Economic Affairs, said on Monday.

The Indonesia Investment Coordinating Board (BKPM) has claimed the number of Chinese expatriates employed as part of  Chinese investments had decreased over the years.

BKPM said it would be prioritizing the support of China-back investments in labor-intensive projects in order to absorb the local workforce.

"Currently there is no room for labor intensive industries in China. Wages are growing, and currently they [the industries] are shifting to a more consumer economy. Therefore, many Chinese industries have expressed their commitment to relocating to Indonesia," BKPM head Franky Sibarani said.

According to  BKPM data, realized investments from China in the first quarter this year reached 339 projects, absorbing 10,167 locals.

China has secured the country’s first-ever high speed rail project connecting Jakarta to Bandung in West Java in addition to its role in the development of power plants and ports.  (dmr)


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