Hong Kong companies considering relocation to Indonesia

Jakarta (ANTARA News) - A number of Hong Kong companies are looking into the possibility of relocating their plants to Indonesia, an executive said. 

"Today we are going to visit Surabaya to look at possible locations for the plants," chairman of the Indonesia-China Business Council Alim Markus said after accompanying a number of Chinese businessmen at a meeting with Vice President Jusuf Kalla here on Tuesday. 

The Hong Kong companies considered Indonesia a very potential market, he said. 

Chairman of the Hong Kong Chamber of Commerce and Industry Wing Kee Chan said China`s declining competitive edge and newly-enacted labor regulation were among the reasons why the Hong Kong companies wished to relocate their plants to Indonesia. 

"Given the regulation, China`s labor wages become higher than Indonesia`s. The second is that China`s business area has moved to the mainland so transportation costs have jumped accordingly," Chan said. 

In addition, Indonesia, with a population of around 230 million, was a lucrative market, he said. 

The companies wishing to relocate their plants to Indonesia were among others engaged in the energy, infrastructure and manufacturing sectors, he said. 

To date, China is the fifth biggest market for Indonesian exports and the third biggest supplier of goods to Indonesia. 

Both Indonesia and China have committed themselves to increasing their two-way trade to US$30 billion in 2010 from US$20 billion in 2008.