Targeting Trade Balance Surplus With China, President Jokowi Encourages Mining Downstream

JAKARTA - President Joko Widodo (Jokowi) guarantees that the Indonesia-China trade balance will be at a surplus point in 2022. He said this when giving a briefing to the leadership of the Indonesian Chamber of Commerce and Industry (Kadin) in Jakarta, Tuesday.

The increase, according to the President, cannot be separated from the government's policy of implementing industrial downstreaming, especially mining commodities, thereby increasing the amount of exports while at the same time encouraging the improvement of the trade balance.

"I remember our trade balance in 2012 was a deficit of 7.7 billion US dollars with China. In 2021 because we have exported steel, our deficit will be 2.4 billion dollars. This year I make sure we have a surplus with China," said President Jokowi.

The President gave an example of the fruit of the policy to stop exports of raw nickel, which has created a leap in trade value for Indonesia.

According to the President, about 5-7 years ago nickel only produced exports worth US$1.1 billion or around Rp16 trillion and that figure jumped to US$28 billion or around Rp306 trillion in 2021.

"In the end, this nickel (export value) will be around 35-40 billion dollars, because the derivatives have not been completed," said the President.

In fact, the President recalled that when he first implemented the policy to stop exports of raw nickel, there were many reactions, including from the Chamber of Commerce and Industry, which stated that Indonesia was not ready.

Therefore, with the success that has been shown, the Head of State invites the ranks of Kadin to take an active role in encouraging the downstreaming of the mining industry.

"Please withdraw this to other raw materials, not just nickel. Ladies and gentlemen, if you are not ready to join, find a partner. Indonesia is very easy, asked the Chairman of the Chamber of Commerce and Industry, people flocked to invest daily, whether from Korea or not. from Japan, whether from China, Europe," said the President.

The President believes that in the end, entrepreneurs from these countries will have no choice but to bring their industries to Indonesia and that Kadin members should be able to continue to play an active role.

"Joint with them, because we really need technology, we also need investment so that there is capital inflow. Things like this must be done," said the President.

Although the President guarantees a trade balance surplus between Indonesia and China in 2022, the latest report from the Central Statistics Agency (BPS) states that Indonesia is still experiencing a deficit.

The latest BPS data states that the export value of Indonesia-China in January-July 2022 has reached US$34.13 billion, while imports amounted to US$38.27 billion, or a deficit of US$4.14 billion.