TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Indonesia likely to see small gains from US-China deal
Each percentage-point decline in China’s growth rate would result in a 0.3 percent drop in Indonesia’s, the World Bank has said.
Change Size
Chinese Vice Premier Liu He and US President Donald Trump shake hands after signing (Reuters/Kevin Lamarque)
I
ndonesia is likely to see a small benefit from the phase-one trade deal between the United States and China as the demand for commodities and the overall Chinese economy are expected to improve.
The trade deal, signed on Wednesday, addresses only a third of the tariffs that have burdened the world’s two largest economies and have fettered the global economy with weak demand, according to Bank Central Asia (BCA) chief economist David Sumual.
However, an uptick in the commodities trade and a better economic situation for China – Indonesia’s main trading partner – will benefit Indonesia, a huge exporter of oil, gas, rubber, textiles and minerals, he added.
“Indonesia depends on the global cycle of commodities as well as economic activities in China. The trade deal will have a small impact on the country’s economy,” David told The Jakarta Post on Thursday.
Each percentage-point decline in China’s growth rate would result in a 0.3 percent drop in Indonesia’s, the World Bank has said. Indonesia’s economic growth slowed to the lowest level in more than two years at 5.02 percent in the third quarter of 2019, according to the latest data available from Statistics Indonesia (BPS). China’s economic growth fell to levels unseen in 27 years at 6 percent over the same period.
The United States and China signed an initial trade deal on Wednesday that will roll back some tariffs and boost Chinese purchases of US products, defusing an 18-month row between the world’s two largest economies but leaving a number of sore spots unresolved, according to Reuters.
The centerpiece of the deal is a pledge by China to purchase at least an additional US$200 billion worth of US farm products and other goods and services over two years, above a baseline of $186 billion in purchases in 2017, the White House said, according to the same report.
