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Government urges companies to export more consumer goods to China
Indonesian businesses need to start exporting consumer goods to reduce its trade deficit with China, says the Trade Ministry.
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Coal is loaded onto a barge on the Mahakam River in Samarinda, East Kalimantan, in this file photo. Indonesia exported 80.7 million tons of coal to China in 2018, its largest coal destination. (AFP/Bay Ismoyo)
T
he government is encouraging local businesses to explore export opportunities with the country’s largest export destination, China, in order to promote more value-added goods rather than raw materials.
As the world’s largest manufacturing country, China absorbs a wide range of raw commodities from Indonesia, with coal topping the list.
According to the Trade Ministry, Indonesia exported 80.7 million tons of coal to China in 2018 at a value of US$3.1 billion, which accounted for 13 percent of all Indonesian exports to the country that year.
Trade Ministry export cooperation development director Marolop Nainggolan said that aside from coal, palm oil, rubber and wood were among Indonesia's top 10 export commodities to China and made up more than 60 percent of all exports.
“China, with its population of about 1.4 billion, needs a lot of consumer goods and they cannot manufacture it all themselves,” he told a press conference in Jakarta on July 11.
“China is a major trade partner, but we suffered a trade deficit of $18 billion [in 2018]. We need to export more consumer goods in order to alleviate that deficit,” said Marolop, adding that many export-oriented businesses were unaware of the potential for exporting consumer goods to the world’s second-largest economy.
The total trade value between Indonesia and China grew 23.4 percent to $72.67 billion last year, although it has continued to suffer a trade deficit over the past five years. The deficit further widened to $18.4 billion in 2018 from $12.7 billion in 2017.
