Indonesia, China forging closer economic ties

By Andi Abdussalam

Jakarta (ANTARA News) - Indonesia and economic giant China are forging closer economic ties with Beijing moving to realize various investment projects worth a total of US$800 million in Indonesia.

The realization of the economic cooperation between the two countries which has been running well got an impetus when Indonesian Vice President Jusuf Kalla made a six-day visit to China from June 6 to 11.

"The vice president`s visit to China is expected to increase the two countries` economic cooperation," chief of the Indonesian embassy`s economic section in Beijing Andriana Supandy said.

Kalla`s agenda included talks with executives of Chinese state-owned companies which had investment project schemes in Indonesia such as Sino-Hydro and China National Offshore Oil Corporation (CNOOC).

"China has a lot of opportunities to increase its investment in Indonesia as both nations` economic relations are now increasing," the vice president said at a meeting with Chinese Communist Party Secretary General for Unnan province, Bai Enpei.

Indonesian Public Works Minister Djoko Kirmanto who accompanied the vice president during his tour of China hoped that the meeting between Kalla and Chinese business officials would expedite the implementation of various Chinese-funded projects in Indonesia.

Indonesia and Sino-Hydro, for example, signed a work contract on April 30, 2007, for the construction of the Jatigede dam project in West Java. Work on the dam is expected to be begin on June 30, 2007.

China has made a loan commitment worth US$800 million for different projects in Indonesia, of which US$250 million are designed for construction of the Jatigede dam in Cirebon, West Java.

The rest of the loan would be used for double-track railway projects, thermal power plants and road construction.

Minister Djoko Kirmanto hoped that the meeting between the vice president and Sino-Hydro executives would expedite the realization of the Jatigede dam project.

With the Chinese financial assistance, construction of the Jatigede dam was expected to proceed smoothly in order to contain rain water for irrigation or for generating electricity.

He said Cirebon district and its surrounding areas were often hit by floods during the rainy season and scarcity of water during the dry spells. That`s why, he added, it needed a dam to contain water when rain falls.

The minister said the design and blueprint of the dam had been made while construction which be started after the Chinese funs had been isursed.

The other sector of cooperation included investment in railway projects.

The vice president held a meeting with China Railway Engineering Corporation (CREC) to discuss the company`s plan to build a 517-kilometer-long railway track in Central Kalimantan province, she said.

A memorandum of understanding (MoU) on the project was signed recently by Central Kalimantan Governor Teras Narang and CREC`s management while Vice President Jusuf Kalla was slated to talk about the financial scheme for the purpose.

In the energy sector, the vice president had a meeting with China National Offshore Oil Corporation (CNOOC) to discuss a plan to ship LNG (liquefied natural gas) amounting to 2.6 million metric tons from Papua Province (Indonesia) to Fujian Province (China).

The LNG supply cooperation would last for 25 years starting in 2009 as demand for LNG in Fujian kept on increasing.

During his visit, the vice president and Chinese officials also discussed the establishment of a 10,000-megawatt power plant as many Chinese companies had won tenders in the project.

In terms of investment, China is now the fifth biggest investor country in Indonesia with an investment worth US$7.4 billion.

Chinese investment in Indonesia, excluding those in the gas and oil sectors, reached US$170 million (38 projects) in 2003, and it rose to US$205 million (80 projects) in 2005.

Indonesia`s investment in China was recorded at US$100.8 million with 115 projects in 2006.

The vice president also focused his attention on increasing trade between the two nations.

Kalla said the aim of his meeting with executives of Chinese companies was to increase the trade volume and investment of both countries.

According to the chairman of the Indonesian Commerce and Industry (Kadin), MS Hidayat, the vice president`s visit was part of Indonesia`s efforts to achieve the target of US$30 billion two-trade between Jakarta and Beijing launched by Indonesian President Susilo Bambang Yudhoyono and his Chinese counterpart, Hu Jinato, in April 2005 in Jakarta.

The trade target was inseparable from the frame of strategic cooperation which basically calls for the two countries to expand cooperation in all fields, he said.

Two-way trade between Indonesia and China tripled to US$19.06 billion in 2006 from US$6.7 billion in 2001.