U.S.-China Trade War Brings Positive Effect to Indonesia: BKPM

TEMPO.CO, Jakarta - The Investment Coordinating Board (BKPM) said that the U.S.-China trade war positively affected the Indonesian economy. One of the ways was through relocation investment or factory expansion in Indonesia.

“I think there is a factory expansion in every quarter following the trade war. Especially investors or factory owners who already owned a factory in China, Vietnam, and Indonesia,” said BKPM chief Thomas Lembong when met in his office, South Jakarta, Tuesday, June 18.

Thomas explained the trade war led many factories of several Chinese companies failed to make expansion. They instead diverted investment to build or expand production bases to a number of regions, especially Southeast Asia.

Read: Trade War May Put Indonesia on Top of China Export Market List

However, he stopped short of detailing names of the factory that would make or had done the expansion. Yet, those fabrics were in the sector of electronics and household appliances.

“Such as refrigerators, microwaves, LCD TV that are now dominated by Korea, and their production chain have been spread since 20 years ago in Southeast Asia,” said Thomas.

Previously, the Industry Ministry recorded producers of electronic products, Sharp Corporation and LG Electronics, planned to relocate a number of their production units to Indonesia. This was one of the opportunities taken by Indonesia amid the escalating trade war between the US and China.

“As a country with stable geopolitics, foreign investors are now targeting Indonesia even more,” said Industry Minister Airlangga Hartarto in a statement, Sunday, June 16.

FAJAR PEBRIANTO

Read: Jokowi Asks Indonesia Take Opportunities in US-China Trade War