Primus Dorimulu, Jakarta – Garibaldi "Boy" Thohir, the president director of Indonesia's second-largest listed coal miner Adaro Energy, has become the chairman of the China Committee at the country's largest business lobby group, the Indonesian Chamber of Commerce and Industry, or Kadin.
Boy said he set his eyes on collaborating with the government to strengthen ties between Indonesia and China, especially beyond trade that already exceeds $100 billion annually.
"I hope that the good relations, which have existed between Indonesia and China for more than 70 years, continue to improve from time to time, especially in economic relations," Boy said during a signing ceremony of a commitment between Kadin and the government to strengthen Indonesia-China cooperation on Saturday.
He hoped that the bilateral relation "can support Indonesia to increase growth and carry out the economic transformation, for a better and more advanced Indonesia."
China today is an economic juggernaut whose moves can make or break global economic growth, including Indonesia.
China has the world's largest population. The country's 1.5 billion population is twice the population of the European Union and 2.5 times the population of Asean. With an area of ??9.6 million square kilometers, China ranks fourth in the world after Russia, Canada, and the US.
The country's gross domestic product (GDP) was more than $16.8 trillion, just behind the United States' annual output of $23 trillion last year. During the decade of the 1980s to the 2000s, the rate of economic growth was above 8 percent. China will become the country with the largest economy in the next two decades, overtaking the US.
In 2021, China's GDP per capita was already above $11,000, compared to Indonesia's $3,900.
In the last two decades, various Chinese products have dominated the world. In 2020, China's exports reached $2.7 trillion and ranked first, beating the US's $2.2 trillion. The world's largest importer in the US, with a value of $2.6 trillion in the same year. In the same year, China's imports were only $2.1 trillion. China's trade surplus with the world is always above $500 billion.
Ranked 16th in the world with a GDP of $1.1 trillion in 2021, Indonesia is still struggling to do business with China. Indonesia's total exports in 2020 were only $181.7 billion, ranking 33, far below Malaysia, Thailand, and Vietnam, especially Singapore, which was ranked ninth in the world with total exports of $599.2 billion.
Second, China ranks first as Indonesia's export destination. In 2021, Indonesia's exports to China will reach $53.7 billion, or 23.2 percent of Indonesia's total exports in the same year. The ups and downs of the Chinese economy have had a huge impact on Indonesia's exports. China is Indonesia's main market for nickel, coal, lignite, vegetable oil, and steel. Vegetable products vary, from coffee to CPO.
Third, Indonesia's largest imported products come from China. In 2021, imports from China reached $56.2 billion, or 28.7 percent of total imports. Indonesia's imports from China include spare parts for transmission equipment, vaccines, electronic products, and spare parts, garlic, steel products, textiles, and textile products, to building materials and household appliances. The decline in China's economic performance will reduce imported products at low prices from that country.
Fourth, Indonesia's trade balance deficit with China has always been a topic of domestic controversies. Since the early 2000s, China has always had a surplus over Indonesia. However, China's trade balance surplus over Indonesia has declined significantly during the pandemic, to $2.5 billion last year from $18.4 billion in 2018.
Fifth, Chinese investment in Indonesia continues to increase. In 2021, China's investment in Indonesia will reach $3.2 billion, or the third rank after Singapore, $9.4 billion, and Hong Kong, $4.6 billion. In addition to infrastructure, China is also involved in downstream nickel and renewable energy.
New China committee
Looking at the situation, Indonesia is determined to improve economic cooperation with China.
The current China Committee, led by Boy Thohir, has already set up significant changes to pursue bilateral opportunities in the future. Eleven members, one secretary, and two deputy chairmen in this new team are young second and third-generation entrepreneurs. They are Alex Kusuma Jona Widhagdo Putri as vice chairman. Anthony Akili, secretary. Maruarar Sirait, Axton Salim, Agus Salim Pangestu, Andre Rasjid, Untyas Anggraeni, Lawrence Barki, Jonathan Tahir, Fuganto Widjaja, William Utomo, Hendra Widjaja, and Rahmad Widjaja Sakti as members.
The new team committee was unveiled to the public on Saturday in an event attended by Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, Foreign Minister Retno Marsudi, and the Chinese Ambassador to Indonesia Lu Kang.
Also present at the event were the Chairman of Triputra Group TP Rachmat, Chairman of Agung Sedayu Sugianto Kusuma alias Aguan, entrepreneur Edwin Soeryadjaja, Chairman of Artha Graha Tomy Winata, Alfamart founder Djoko Susanto, and President Director of Elang Mahkota Teknologi Alvin Sariaatmadja.
Kadin Chairman M. Arsjad Rasjid said the new committee created momentum to improve China's contribution in Indonesia's investment and trade.
"Hopefully, this will be a spearhead for Indonesia's economic momentum to rise again. Our global investment is $50 billion. This year, the target is US$80 billion; in the future, it will be even larger," Arsjad said. On the other hand, he also hoped that Indonesian products could be exported abroad.
Kadin will hold a B20 Roadshow in Beijing, China, on July 25-27. It aims to improve trade and investment relations with China and invite the business community in China to participate in the B20 Business Forum event activities.