Minister of Finance (Menkeu) Sri Mulyani said that the escalation of tensions between the United States (US) and China is still having an impact on the economic sector.
According to him, geopolitical factors play an important role in the way the government and economic actors take policies.
"The global consolidation has changed, so many decisions are affected by this factor," he said while speaking at the Central Development Coordination Meeting (Rakorangpus) on Thursday, April 6.
The Minister of Finance explained that one of the things that clearly shows is how the US produces the latest regulations based on the content of national interests and the latest developments in the world.
For example, today (the government) of America proposed (to parliament) the so-called Inflation Reduction Act. Judging from the title of the law, it seems that this is intended to reduce inflation. However, content from the legislation clearly shows that it is de-globalizing, which is trying to return investment to the United States," he said.
The Minister of Finance added that this strategy used by the US indirectly targets the weakening of China's dominance in the global economy.
"So the United States does not depend on other countries, such as China, whose trade relations and investments have been extraordinary," he stressed.
The Minister of Finance said that the direction of investment would be driven a lot by the policies of a pair of countries.
Two economic giants will affect how the capital flows move, because they are not only influenced by economic incentives but also in terms of security. This is then given an extraordinary subsidy, "he said.
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