Tag: Indonesia and China business

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China Buys Indonesian CPO, the Value is IDR 40 Trillion

Indonesian businessmen and China have signed contracts to purchase crude palm oil (CPO) products and their derivatives. The export value of the signed CPO reached US$ 2.6 billion, equivalent to Rp. 40.3 trillion (exchange rate of Rp. 15,500). The memorandum of understanding on trade cooperation was signed by the China Chamber of Commerce for Import and Export for Foodstuffs, Native Produce and Animal By-Products (CFNA) with four Associations for Indonesian palm oil products and their derivatives.

 Minister of Trade Zulkifli Hasan alias Zulhas previously said that the agenda for signing a trade contract at the Ministry of Trade signed the purchase of 1 million tons of CPO products. Where the figure was previously planned during President Joko Widodo’s meeting with Chinese President Xi Jinping. However, not long ago the Ministry of Trade reported that the trade agreement that had been made suppressed the purchase contract of 2.5 million tons with a transaction value of US$ 2.6 billion. The transaction was carried out in the signing of 16 trade contracts by 9 Indonesian business actors with 13 Chinese buyers assisted by the China Chamber of Commerce for Import and Export for Foodstuffs, Native Produce and Animal By-Products (CFNA). Zulhas also expressed a request to make it easier for other Indonesian products to enter the Chinese market. In this way, it is hoped that the cooperation between the two countries will continue to be profitable.

For information, in January to August 2022 exports of Indonesian palm oil products and their derivatives to China reached US$ 3.6 billion. Based on data from the Central Statistics Agency processed by the Ministry of Trade, the export volume of palm oil products and their derivatives from Indonesia to China in 2021 will reach 6.6 million tons. That value increased 14.17% from the previous year. In 2021, the export value of Indonesian palm oil products to China reached US$ 6.06 billion, an increase of 82.87% from the previous year. This increase was due to the increase in world CPO commodity prices in the last year.

On the same occasion, Deputy Minister and Deputy Minister for International Trade of China Wang Shouwen, said he acknowledged that Indonesia had been a source of palm oil for China for 7 consecutive years. His party is committed to continuing to improve bilateral relations, both for CPO imports and others.

November 11, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6400751/china-borong-cpo-ri-nilainya-rp-40-t)

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Indonesia-Germany Sign 16 Renewable Energy Agreements Worth IDR 78 Trillion

Indonesia and Germany strengthen cooperation in the development of new and renewable energy (EBT). Indonesia can learn more lessons and experiences from Germany, which has been able to show off in the development of renewable energy development technologies. The government itself hopes that the private sector in the country can take a bigger role in sustainable development. Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Panjaitan witnessed the signing of 16 cooperation agreements worth US$ 5 billion or the equivalent of Rp78 trillion (exchange rate of Rp15,600) in Bali, Friday. He reminded that investment in sustainable development is actually a collaborative effort.

Luhut stressed the importance of the private sector’s role. “The role of the private sector is very important in financing sustainable development. And there will be many more agreements and agreements that will be signed until the end of the B-20 summit. Everything must be done quickly, because the energy transition demands Indonesia to be fast. Starting from manpower, technology, accessibility to renewable energy, to incentive programs that all accelerate the transition towards a low-carbon economy. Remember, the world has changed rapidly and we must not be late. Greening the entire power-supply system is a call that Indonesia must answer. Currently, the industrial sector consumes 76 percent of energy from fossil fuels. Emissions from our power grid are currently listed as one of the highest in the world, and this makes Indonesian industry less competitive in this green economy landscape,” he said, Friday (11/11/2022).

The signing of 16 agreements in the field of renewable energy involved 11 countries. Renewable energy development cooperation between Germany and Indonesia involving the private sector is very important to pursue the Paris Agreement commitments, and fulfill the national energy mix of 23 percent by 2025. Indonesia must maximize local potential to ensure EBT development is in line with Indonesia’s economic conditions and challenges ahead.

November 11, 2022, detikFinance

(https://finance.detik.com/energi/d-6400712/ri-jerman-teken-16-perjanjian-energi-terbarukan-senilai-rp-78-t)

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Indonesian Culinary Exports Reach US$ 35.9 Billion

The performance of the Indonesian food and beverage industry will still show positive results in 2022. The industry will even make a large contribution to GDP. Director General of Agro Industry of the Ministry of Industry Putu Juli Ardika said the food and beverage industry is the driving force for the non-oil and gas processing industry in Indonesia. This is due to Indonesia’s abundant natural resources and increasing domestic demand. “Indonesia’s food and beverage industry GDP grew 3.7% in the third quarter of 2022. So that makes it the sub-sector with the largest contribution to GDP,” said Putu when met by detik.com at the inauguration of the SIAL InterFood 2022 at JIEXPO, Kemayoran, Wednesday (9/11 /2022).

The Indonesian Government’s efforts to control the COVID-19 outbreak have also been a factor causing the non-oil and gas processing industry to experience growth. In fact, the sector presented a fairly positive performance. “This is shown by the performance of the non-oil and gas processing sector which managed to recover 4.88% in the third quarter of 2022,” Putu explained.

“In the period from January to September 2022, exports of the food and beverage industry reached US$ 35.9 billion, experiencing a positive trade balance compared to imports of food and beverages in the same period of US$ 12.7 billion. The food and beverage industry was able to attract investment of Rp41,37 trillion until the second quarter,” said Putu.

“The SIAL InterFOOD exhibition at JIEXPO, Kemayoran, Jakarta November 9-12 2022 is the right exhibition to promote Indonesian food and beverages that have the potential to be known to foreign markets. In addition, the participating micro, small and medium enterprises (MSMEs) at this exhibition we can expand our network and increase our business to go international,” said Daud D Salim, CEO of Krista Exhibitions.

November 9, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6397161/gokil-ekspor-kuliner-indonesia-tembus-us-359-miliar)

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Indonesia’s GDP Growth Accelerates to 5.72 Percent

Amid concerns over global economic activity and reduced cross-border trade, Indonesia has posted another solid GDP reading, setting the country apart from many others ahead of the Group of Twenty (G20) Summit to be hosted in Bali this month. Indonesia’s GDP was up 5.72 percent year-on-year (YoY) in the third quarter, Statistics Indonesia reported in an online press briefing on Monday. That exceeds the 5.44 percent YoY growth rate recorded in the second quarter and 5.01 percent YoY logged in the first. The domestic economy is benefiting this year from relaxed pandemic restrictions at home and higher prices for key export commodities in global markets.

The figures presented on Monday are lower than forecasts from state-owned Bank Mandiri and financial research firm Moody’s Analytics, which had predicted third-quarter GDP growth of 6 percent YoY and 6.01 percent YoY, respectively. Compared to the second quarter, Indonesia’s GDP was up 1.81 percent, which is lower than Bank Mandiri’s forecast of 2.09 percent and marks a slowdown from the quarterly growth of 3.72 percent registered in the second quarter. Other economic indicators also pointed up in the third quarter, such as a trade surplus that increased 12.58 percent YoY, retail sales that rose 5.52 percent YoY, and income tax receipts that were up 26.10 percent YoY.

“The pattern of the preceding years shows that quarterly growth in the third quarter is always slower than in the second quarter because of seasonal factors. We are an open economy, hence very dependent on major trading partners,” BPS head Margo Yuwono said on Monday.

Indonesia’s latest GDP report comes after several other major economies also posted improved growth for the same quarter. Household spending, which currently accounts for 50.38 percent of the economy, was up 5.39 percent YoY in the third quarter. Investment, also known as gross fixed capital formation, was a drag on overall GDP growth as it was up just 4.96 percent YoY. International trade contributed to annual economic growth due to stellar exports of coal, processed oil, and natural gas, which grew by 21.64 percent YoY. However, imports outpaced exports with a growth of 22.98 percent YoY, driven by increased industrial imports of capital goods and raw materials. Government spending, meanwhile, continued to decline, dropping 2.88 percent YoY due to lower state budget spending on goods and services. Transportation and warehousing remained the sector logging the highest growth with 25.81 percent YoY, followed by hospitality services with 17.83 percent YoY. Manufacturing sector production, meanwhile, grew 4.83 percent YoY, while mining expanded only 3.22 percent YoY and agricultural output rose at a lackluster 1.65 percent YoY.

November 7, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/11/07/indonesias-gdp-growth-accelerates-to-5-72-percent.html?

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Indonesia Extends Gas Exports to Singapore by Five Years

The Energy and Mineral Resources Ministry has extended its contract to supply gas to Singapore for five years from the initial expiry date of 2023. Energy and Mineral Resources Minister Arifin Tasrif told reporters that the government would continue supplying gas to the city-state until 2028, having considered domestic supply and demand.  He added that the volume exported under the extended contract would be lower than before to prioritize domestic demand.

“[Indonesia] still has [adequate] gas reserves, so we’re extending [gas exports to Singapore] for the next five years. We need to help each other,” he said on Friday.

Upstream Oil and Gas Regulatory Task Force (SKK Migas) head Dwi Soetjipto explained that declining gas export volumes were due to increased demand from the domestic fertilizer industry.  He estimated a 30 to 40 percent cut from the previous gas contract.

“We predict that [gas] prices will increase due to high demand,” Dwi said, also on Friday. He added that the government had yet to sign the five-year contract extension but expected it to be signed in November.

The energy minister announced in 2020 a plan to stop supplying gas to the city-state in the hope of creating added value for the nation’s natural gas and reducing its trade balance deficit.

Indonesia’s gas exports to Singapore come from several sources, including from the Corridor Block operated by ConocoPhillips (Grissik) Ltd., Repsol’s Talisman Corridor Ltd. and Pertamina upstream oil sector arm Pertamina Hulu Energi Corridor, which has a supply of 300 million standard cubic feet per day (mmscfd). Singapore’s natural gas consumption in 2020 was approximately 1.22 billion cubic feet per day (bcfd), according to a 2021 British Petroleum (BP) statistical review.

October 28, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/10/28/indonesia-extends-gas-exports-to-singapore-by-five-years.html?)

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Indonesian Online Transactions of IDR 401 Trillion, Ministry of Trade Wants to Digitize 250 Thousand MSMEs

Minister of Trade Zulkifli Hasan (Zulhas) is targeting 250,000 small, micro and medium enterprises (MSMEs) to be digitized through electronic/e-commerce (e-commerce) platforms. To that end, the Ministry of Trade is strengthening collaboration with GoTo (Gojek and Tokopedia). It was noted that throughout 2021, online shopping was able to generate transactions of up to IDR 401 trillion. He hopes that with the digitization of MSMEs, especially people’s market traders, the number of transactions can continue to increase.

“To achieve the target of 250,000 digitized MSMEs, we are ready to continue to work with PT GoTo. I believe GoTo can play an important role as a digital platform that integrates on-demand services through entities within the company,” Zulhas said in a written statement, Thursday ( 27/10/2022). He conveyed this at the Advanced Digital Conference: Market Digitization Via the GoTo Ecosystem today, Thursday (27/10) in Jakarta. This event was held by Gojek, Tokopedia, and Goto Financial.

Digitizing the people’s market is one of the tasks given by President Joko Widodo to the Ministry of Trade. Because, this encourages people’s market traders to compete with traders who sell online.

Zulhas explained that his party is collaborating with various market locations/ride hailing to help the merchants’ onboarding process into the application. One of the things that has been done is collaborating with Tokopedia to push the market into the application. It is known, currently the program has been running in 10 markets throughout Indonesia.

Due to the COVID-19 pandemic, people’s spending patterns in the era of e-commerce development have changed. These changes increase the increase in consumers who shop through e-commerce. In 2021, consumers who shopped through e-commerce were recorded at 25% from the previous year which was only 11%.

October 27, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6373272/transaksi-online-ri-rp-401-t-kemendag-mau-digitalkan-250-ribu-umkm)

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Instant Noodles to Indonesian Coffee ‘Fly’ to Poland

The government is boosting exports to various countries. Central and Eastern Europe can be a potential market for Indonesian export products, with Poland being the main entry point. Poland has great potential to channel export products from Indonesia to the European Union, Western and Southern Europe, and Central Asia. Throughout 2021, Indonesia’s export value will reach US$ 1.78 billion to the region, with Poland being the highest export destination.

This data is contained in the book Road to Poland which was launched at the Indonesia Central and Eastern Europe (INACEE) Business Forum 2022 event on October 19, 2022, with the theme ‘Connecting Businesses’. This forum facilitates the signing of business agreements between Indonesian business actors and partners in several Central and Eastern European countries.

The book Road to Poland reviews the opportunities, developments and projections of the Polish economy amidst the dynamics of global trade developments, including with Indonesia. This book reviews the competitiveness of Indonesia’s leading export products to Poland, including the potential for export development and cooperation or business opportunities that can be increased between the two countries.

“This is a form of adaptation in finding solutions to overcome today’s world challenges, in an effort to increase cooperation and collaboration in the economy, trade, investment and other fields between Indonesia and partner countries, especially in the Central and Eastern Europe region,” said the Head of the Division. Indonesia Eximbank Institute (IEB Institute) LPEI Rini Satriani, written Thursday (27/10/2022).

Poland is Indonesia’s largest export destination for Central and Eastern Europe with a total export value of US$ 654.6 million in 2021, up 48.40% (YoY) and January-August 2022 of US$ 662.30, up 54.13% (YoY). Some Indonesian products that are in demand in Poland include instant noodles, coffee candy, batik, furniture, coffee and palm oil. Entering new markets is a challenge for exporters.

October 27, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6371540/mi-instan-sampai-kopi-asal-ri-terbang-ke-polandia)

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Indonesia to Rank Fourth for Airline Passengers in 2040

Airports Council International (ACI) Asia-Pacific says Indonesia is poised to become one of the fastest-growing markets for the airline industry despite the current global economic slowdown and relatively slow growth in the Asia-Pacific region. ACI director general Stefano Baronci said that, according to an ACI projection, Indonesia would rank fourth in the world in terms of passenger traffic by 2040.

“Indonesia is seen to be in a better position than other countries in the region to see its passenger traffic bounce back to the pre-pandemic levels,” Baronci told on Tuesday.

He said he expected Indonesia to grow much faster than other countries in the region at approximately 11 percent annually up to 2040, given the archipelagic nation’s geography and its economic growth forecast. ACI forecasts indicate that close to 19.7 billion passengers are expected to traverse the world’s airports in 2040, more than double the 9 billion passengers recorded in 2019. The Asia-Pacific region is expected to have approximately 8.9 billion passengers by 2040.

“So, what [does this mean for] Indonesia? [Stakeholders need to] improve predictability and certainty,” he said, adding that every country had its own capacity and level of maturity to find a way to reach that objective.

In Indonesia’s case, he referred to the implementation of the airport collaborative decision-making (ACDM) process currently taking place in Jakarta as a way to coordinate ground operations and air traffic. The ACDM is a process in which the stakeholders of operations, such as airport operators and air traffic controllers share information to improve policies, planning, real-time coordination as well as decisions regarding operations.

October 21, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/10/21/indonesia-to-rank-fourth-for-airline-passengers-in-2040.html?)

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The First Health and Tourism SEZ in Indonesia is Being Built in Bali

PT Aviasi Wisata Indonesia (Persero), known as Injourney, through its subsidiary PT Hotel Indonesia Natour (HIN), in collaboration with PT Pertamina Bina Medika-Indonesia Healthcare Corporation (IHC) is building the first Special Economic Zone (SEZ) for Health and Tourism in Indonesia. Indonesia, located in Sanur, Bali.
The government’s decision to build the Sanur SEZ that integrates the health sector with the tourism sector is in line with the focus of the G20 Presidency of Indonesia, namely inclusive health services, digital-based economic transformation, and the transition to sustainable energy. Bali was chosen as the location of the Health and Tourism SEZ to provide opportunities for patients to get world-class health services while taking advantage of the beauty of Bali as a tourist choice. The island of Bali has great potential to become the center of medical tourism in Southeast Asia.
As the first SEZ in Indonesia that combines the health and tourism sectors, the government hopes that the Sanur SEZ can contribute to national economic growth. The Sanur SEZ is also encouraged to become a new investment location, as well as to absorb workers. It is expected that after fully operating, the Sanur SEZ can absorb around 43 thousand workers. By 2045, the Sanur SEZ is expected to be able to increase its total foreign exchange earnings of up to US$ 1.28 billion.
The development of the Sanur SEZ is projected to be able to absorb around 4% to 8% of Indonesian people who seek treatment abroad. Thus, it is expected that by 2030, the number of patients seeking treatment at the Sanur SEZ will reach 123,000 to 240,000 people. Data shows that the Indonesian population is a major contributor to medical tourism in the region with more than 2 million citizens traveling abroad in 2019 for health services worth US$ 6 billion.
Minister of SOEs, Erick Thohir believes the development of the Sanur Health and Tourism SEZ will boost the economy both nationally and locally. “The potential is big enough so that it can become a priority to revive tourism activities in Bali,” Erick said in a written statement, Saturday (15/10/2022).

October 15, 2022, detikFinance
(https://finance.detik.com/berita-ekonomi-bisnis/d-6350190/kek-kesehatan–pariwisata-pertama-di-ri-lagi-dibangun-di-bali)

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Indonesia’s Economy Still Strong, Capital Market Still Promising

Danareksa Investment Management’s chief investment officer, Herman Tjahjadi, said that the Indonesian capital market is still promising with foreign investors who have entered the JCI stock market of Rp70 trillion since the beginning of the year. This means that global investors still view positively the Indonesian economy which continues to have the potential to grow.
“Towards entering the new year (the end of the year), it is likely that Indonesia’s GDP growth will still be positive, which is around 5.20%, this is good compared to other countries,” he said at the 2022 CNBC Indonesia Awards ‘The Best Asset Management’, Friday (14/10/2022).
He added, for 2023 it is estimated that Indonesia’s GDP will grow at the level of 5-5.1%. Even though there is an indication of a decline compared to this year, this figure is still very good compared to other countries. When global investors see that Indonesia’s economic growth is still positive, investment interest will not disappear.
Another factor that becomes the criteria for global and domestic investors to enter the country’s capital market, one of which is currency. As is known, the Rupiah depreciated by 7%, but according to him, when compared to other developing country currencies, Indonesia is still considered to be better. Furthermore, another factor is Indonesia’s inflation rate, which according to him is better than other countries, which is only around 5.59%.
“Even the United States is now 8.2%. These three factors (GDP, Currency, and Inflation) are relatively better than other countries,” said Herman.

October 14, 2022, CNBC Indonesia
(https://www.cnbcindonesia.com/market/20221014202250-17-379916/ekonomi-ri-masih-kuat-pasar-modal-masih-menjanjikan