Kemenkop UKM Explores Cooperation With China, Develops MSME Supply Chain

JAKARTA - The Ministry of Cooperatives and SMEs (Kemenkop UKM) together with the Indonesian Shopping Center Retailers and Tenants Association (Hippindo) are exploring the potential for cooperation with a number of Chinese investors who are members of The Changsa E-Commerce Association, to encourage the development of technology-based MSMEs.

Expert Staff to the Minister for Productivity and Competitiveness of the Ministry of Cooperatives and SMEs Herbert Siagian explained that the potential for economic cooperation between Indonesia and China is very large, especially in the development of MSMEs.

"I hope that in this meeting there will be opportunities for cooperation between Indonesia and China in empowering MSMEs, especially through technology to encourage economic growth and development," Herbert said in his official statement, Tuesday, May 28.

Herbert hopes that the cooperation plan between Hippindo and The Changsha E-Commerce Association can be followed up by ensuring the involvement of MSMEs to be included in the supply chain.

"We have implemented various policies and programs for the progress of MSMEs in Indonesia, including making MSMEs part of the global supply chain, expanding marketing networks (exports), allocating government procurement expenditures for MSMEs and strengthening business partnerships," he said.

Based on data from the Central Statistics Agency (BPS), Indonesia's total export value to China throughout 2023 was recorded at US$258.82 billion. The main commodities exported are mineral fuels, animal/nabati fats, iron and steel and machinery and electronic equipment.

He assessed that China is one of the countries that has developed in the infrastructure sector, manufacturing industry, including the agricultural sector. Thus, there are many opportunities for cooperation that should be established by both countries.

On the same occasion, Chairman of Hippindo Budihardjo Iduansjah invited business actors in Indonesia to take advantage of the 40 percent allocation program for government spending through the Government Goods/Services Procurement Policy Institute (LKPP). According to him, the market potential that business actors can achieve, especially MSMEs, is very large.

Budihardjo also explained that The Changsha E-Commerce Association can take advantage of the program as long as they establish companies in Indonesia and are able to comply with regulations related to the level of domestic content (TKDN).

Therefore, he invites prospective Chinese investors to immediately plan the construction of factories or industries in Indonesia because the potential for the domestic market is very large.

"So, we need vendors and factories to meet the domestic market and in the future it can be exported. We know our domestic market is very large, if it is able to meet TKDN, the opportunity is extraordinary," he said.

Meanwhile, President of The Changsha E-Commerce Association Wang Yingping appreciated the good intentions of the Kemenkop UKM and Hippindo who will cooperate in business.

According to him, this is a good opportunity for business people in China to maximize their growth more.

"Our members there are more than 300 consisting of various sectors. So, our arrival here is to conduct policy consultations, learn from each other, know and explore the potential that exists," he said.

Wang hopes that it can generate cooperation commitments so that bilateral relations between the two countries can be more solid.

"There has been a lot of economic cooperation between Indonesia and China. Hopefully, our arrival can become a platform to expand existing cooperation," he added.