Simla Stock：RECP special issue ｜ Issue 4： ＂Hands＂ in China and Indonesia to share new opportunities for RCEP development
Indonesia is the largest economy in ASEAN, and its population and land area ranked first among ASEAN countries.India has become the main trading partner and the second largest source of investment in Indonesia for 11 consecutive years.2023 is the 10th anniversary of the establishment of a comprehensive strategic partnership between China and Indonesia.From March 31st to April 2nd, 2024, Indonesia’s newly elected President Plabovo came to China for a state visit. India became the first visit to the country after his election president.Pay attention to the relationship.For a long time, Indonesia’s "Global Ocean fulcrum" strategy has matched with India’s "Belt and Road" initiative [1].Simla Stock
Indonesia’s legal procedure in RCEP’s effectiveness in 2023 is an important step to promote the implementation of RCEP’s comprehensive effect and further consolidate the foundation of China -Indonesia cooperation.Chain supply chain joint development.
This special issue mainly sorted out the current status and potential of the development of economic and trade cooperation between China and Indonesia, an important economic and trade framework agreement, the evaluation of professionals, and the challenges faced by China and Indonesia’s economic and trade cooperation.Successful experience in the Indonesian market and challenges facing.
1. The current status of the development of economic and trade cooperation between China and Indonesia
India has become the largest trading partner in Indonesia for 11 consecutive years. The bilateral trade between China and Indonesia has maintained toughness under the impact of the epidemic and has rebounded strongly in the past two years.From the perspective of total volume, since 2013, India has maintained its position in Indonesia’s largest trading partner for 11 consecutive years.After the bilateral trade volume contracted slightly by 1.9縛 the impact of the new crown in 2020, it won 54.1%and 21.5%of the strong rebound in 2021 and 2022, respectively.Structurally, Indonesia’s main imports of electromechanical, audiovisual equipment and parts, accessories and metals in Indonesia (mainland), and the total proportion of the two in 2023 reached 56.6%.In addition, textiles and chemical products accounted for about 9%(see Figure 1).It can be seen that although Indonesia has abundant natural resources, the relatively weak industrial foundation limits its ability to develop high value -added industries, leading to high dependence on imported goods.India has mature industrial chain and technological advantages in industries such as machinery, electronics, chemicals, textiles, and plastics. Its products and complete equipment can not only meet the diversified needs of the Indonesian market, but also meet the consumption level of the Indonesian people.Therefore, Indian enterprises should seize this opportunity, actively open up the Indonesian market, tap new business growth points, and achieve mutual benefit and win -win.
Figure 1 2023 Indonesia’s imported product type distribution
In terms of investment, India continues to become the main source of investment in Indonesia.At present, more than 1,000 Chinese -funded enterprises have carried out business in Indonesia, covering energy, communications, power, mining, Internet, and digital economy.In 2023, India’s investment in Southeast Asia was enthusiastic, and about 50%of regional investment flowed to Southeast Asia, an increase of 27%over the previous year.Among them, Indonesia became the biggest beneficiary and attracted about $ 7.3 billion in Indian investment [2].It is worth noting that China Enterprises have participated in important infrastructure construction projects in Indonesia.As the flagship project of the “Belt and Road” in China and Indonesia, the Yawan high -speed rail has achieved remarkable results since its operation.As of April 17, 2024, the Yawan high -speed railway operation has been operating for half a year, and a total of 2.56 million passengers have been sent, and the passenger flow has continued to increase.The success of the project has set a new benchmark for the pragmatic cooperation between the two countries in the fields of infrastructure and capacity, but also shows the advantages of Indian technology, equipment and manufacturing.
List of major infrastructure construction projects involved in Indonesia in Indonesia
December 2023
La Akwa Dam ProjectLucknow Wealth Management
June 2023
Jeonarata dam
January 2022
Three Treasures -Demark
November 2017
Miraku coal -fired power generation project
November 2015
Nanyu No. 1 Power Plant Project
October 2015
September 2013
Barbiba Luku Power Station
July 2013
Ponka Susu Thermal Power Station
November 2008
Badan TJK Power Plant
2. The important economic and trade framework agreement between China and Indonesia
On January 2, 2023, the Regional Comprehensive Economic Partnership Agreement (RCEP) officially took effect on Indonesia.According to the agreement, Indonesia will cancel 65.1%of tariffs from Indian products, and India will also implement zero tariff policies from 67.9%of Indonesian products.This measure will enable foreign trade companies in the two countries to enjoy the discount of tariff reduction.
Based on the Indonesian-ASEAN Free Trade Zone, Indonesia has given India a zero-tariff treatment to India, including some car parts, motorcycles, television, clothing shoes, boots, plastic products, etc.At the same time, India will also reduce taxes on Indonesian pineapple juice and canned pineapple juice and canned pineapple juice and canned, coconut juice, pepper, diesel, paper products, some chemical products and automotive parts, and further open the market.
After RCEP took effect, the tariff reduction and exemption of steel products imported from India is particularly large, with a reduction ratio of 12.5%to 20%.After the tariff reduction, local imported companies in Indonesia, whether they are state -owned enterprise engineering construction units or private enterprise trading companies, only need to pay 11%VAT and 2.5%of imported value -added tax.At the same time, the favorable competitive advantage of Indian steel industry itself is the benefits of superimposed tariff reductions, which will help it gain certain advantages in the projects in China and Indonesia in the future.
In addition to enjoying the low tax rate, Indonesian consumers will buy products from India in the future will be more efficient and convenient.Due to the RCEP regulations, the customs procedures were simplified, the tax reporting policy was relaxed, the efficiency of cross -border e -commerce logistics was improved, and transportation costs were reduced.With the effectiveness of RCEP, the rules of trading in the region will gradually be standardized and unified. The landing of unified rules such as the rules of origin, customs procedures, inspection and quarantine, and technical standards will greatly weaken trading barriers.China and Indonesia are also large population and economic powers, but for many years, the scale of bilateral trade has lived in the fifth long -term and long -term trade in India and ASEAN member states.The scale of national body volume is compatible.
3. Professionals evaluate the trade potential of China and IndonesiaVaranasi Investment
China and Indonesia are both developed countries and important emerging economiesNew Delhi Wealth Management. When the current centennial change bureau and global epidemic are superimposed, deepening the cooperation between the two countries is of great significance.RCEP aims at comprehensive, modern, high -quality, and inclusive free trade agreements. It will effectively promote domestic and international dual cycles, promote the establishment of a new development pattern, and create more opportunities for other countries including Indonesia to participate in the Indian market. At the same timeIt is of great significance to crack the bottlenecks of economic and trade cooperation between China and Indonesia and consolidate the deepening of new cooperation space, and strives to promote China -Indonesian cooperation to a new level.
Bai Ming, deputy director of the International Market Research Institute of the Ministry of Commerce, said: "Indonesia is the largest country in ASEAN and has a large market with a population of more than 100 million.The effect will be greater than that of a small country in RCEP, it is difficult to produce a huge resonance effect. "[3]
Shi Ziming, the Minister of the Embassy in Indonesia in Indonesia, said: "RCEP uses a negative list model to make a high level of open promise in the five non -service industries including manufacturing, agriculture, forestry, fisheries, and mining.E -commerce provides institutional guarantees. The above areas are all key areas of Indonesia’s investment in Indonesia.You can also use your own advantages and flexible decisions to dig more business opportunities.]
Zhang Chaoyang, chairman of the Indonesian Hindu Chamber of Commerce, said: "RCEP takes effect to Indonesia is an important step to promote the implementation of RCEP comprehensive effect. It will inject new driving force for regional economic integration, regional and global economic growth, further promote regional industrial chain supply chain cooperation"[5] [5]
The Indonesian Minister of Trade Zoras said: "Approval RCEP is one of the important achievements of Indonesia’s 2022 trade cooperation. The official effect of RCEP will start a new history of Indonesia’s trade cooperation. According to the prediction of the Indonesian Ministry of Trade, within 5 years of RCEP implementation, Indonesia’s exports will grow in 5 years.8%to 11%, foreign investment will increase 22%"[6]
Dai Ning, Consul General of Indonesia, said: "India and Indonesia have strong trade complementarity. The main products exported to Indonesia include mechanical and electrical products, steel and their products, which are mainly industrial products.Commodities include mineral fuel, steel, animal and plant oils, etc., mainly energy resource -intensive products and agricultural products.]
4. The challenges faced by the economic and trade field of China and Indonesia after the effective implementation of RCEP
1. Market access and industry competition
The implementation of RCEP will further reduce tariffs between member states and promote the free flow of goods and services.For India and Indonesia, this means that more foreign goods and services will enter the domestic market, increasing competitive pressure facing local companies.Although this helps to promote consumer welfare and promote economic efficiency, it will also have an impact on industries that have not been fully prepared and competitive.For example, Indonesia’s furniture and textile industries will face fierce competition from member states such as India.
2Lucknow Stock. The reorganization and upgrade of the supply chain
In order to better integrate the regional economic cycle brought by RCEP, India and Indonesia need to promote the reorganization and upgrade of the supply chain.This not only involves strengthening logistics cooperation with other member states and reducing the cost of cross -border transportation. It also needs to accelerate the adjustment of the industrial structure and the technical upgrade to improve the overall competitiveness and toughness of the industrial chain and supply chain.This process may be accompanied by the pain points of short -term costs and industrial adjustment.
3. Challenge of intellectual property protection
RCEP emphasizes strengthening intellectual property protection, which is of great significance to promote technological innovation and protect original results.India and Indonesia need to further improve their own intellectual property legal system during the implementation process and increase law enforcement.For large powers, improving the level of intellectual property protection is a systematic project that requires the joint efforts of the government, enterprises and society, especially how to deal with transnational intellectual property disputes to prevent technology and business secret leaks.
4. New opportunities and challenges of digital economy and data security
RCEP encourages the development of e -commerce and digital economy, and at the same time, it has established standards for cross -border data flow.As a country with a huge Internet user base, India and Indonesia need to ensure the security of data, personal privacy protection and electronic transactions while promoting the development of the digital economy.This requires the two countries to strengthen domestic legislation, establish and improve data collection, storage, processing, and cross -border transmission systems, and at the same time improve the awareness of data security of enterprises and the public.
SAIC -GM Wuling opened the market in Indonesia
As one of the world’s fourth population and the founding country of ASEAN, Indonesia has great room for development.But Indonesia, like Thailand, Malaysia and other ASEAN countries, still takes certain protective measures for automotive products produced by India.Only by integrating into the local market can companies develop better in the local area.
In 2015, with the "Belt and Road" policy inspiration, SAIC -GM Wuling began to build its first complete car factory in Indonesia.According to statistics, Indonesia, Thailand and Malaysia accounted for about 90%of Southeast Asian cars in 2014.In the past, when car companies developed the Southeast Asian market, they looked at the Thai market more. For example, SAIC Group worked with Thailand Zhengda Group to build a factory and sell MG brand models in the local area.However, the growth momentum of the Indonesian market was not to be underestimated.According to data provided by the ASEAN Automobile Federation, GAIKINDO (Indonesia Automotive Industry Association) and the Thai Industry Alliance (FTI), Indonesia’s production volume increased by 7%in 2014 to 1.3 million units. On the contrary, Thailand’s production volume fell by 23%, 1.88 million vehicles.In addition, under the encouragement of a series of reform policies promoted by the Indonesian government, Tata, GM, and other car companies were also attracted to the establishment of factories.According to international experts, Indonesia has potential to surpass Thailand in the next 7 to 10 years and become the largest automotive market in Southeast Asia.
Before SAIC -GM’s Wuling entered the Indonesian market, Japanese car manufacturers almost monopolized the country’s entire automotive industry, from spare parts production, vehicle assembly to final sales, leasing services and used car markets.This control made the old car stubbornly survive.Before Indonesia began operating the entire vehicle factory, SAIC -GM Wuling has been actively seeking a variety of paths for overseas market expansion.They not only exported the vehicle and the packing vehicle group (CDK), but also sent employees to support the destination market. They mainly used General Motor’s global network to adopt the strategy of "borrowing a boat out of the sea" to carry out the international promotion and management of the automotive industry chain.I have accumulated rich experience in overseas operations.
In 2015, SAIC -GM Wuling decided to invest $ 700 million to set up a 60 -hectare production base in Indonesia. This not only marks the first large -scale investment of Indian auto manufacturers overseas, but also its expansion of international markets and challenging Japanese brands in Indonesia for a long -term rule in Indonesia.Important measures.Unlike the original overseas sales of the original vehicle, the establishment of a factory in Indonesia is the first independent investment in equipment and resources overseas in Indonesia, and the management of manufacturing technology, intellectual property rights, business operations such as intellectual property rights, and business operations are the first time.Sales service system.
For the important decision to build an entire vehicle factory, Sun Zhonghao, deputy general manager of SAIC -GM’s Wuling Indonesia Automobile Co., Ltd., said that Indonesian consumers tend to choose home MPVs and SUV models with high cost -effectiveness.Although Japanese brands dominate the local market, their technology is relatively old.SAIC -GM’s products have strong competitiveness in the Indonesian market due to advanced technology, diverse models and reasonable space layouts.Therefore, the company chooses to invest in a modern vehicle production plant in Indonesia, and hopes to achieve long -term business development and expansion in the Indonesian market in this way.
In 2019, SAIC -GM Wuling basically covered 88%of the Indonesian regional market and successfully entered the Indonesian mid -range SUV market.In 2020, SAIC -GM Wuling successfully won the heel in the second echelon of Indonesia with the help of the three models.In August 2021, SAIC -GM Wuling Indonesia Automobile Co., Ltd. was completed in the fourth anniversary, with a cumulative sales of 66,000 units. It stood out among many Indian car brands.Popular Indian car brand.In 2022, in the total sales of 10.48 million units in the Indonesian car market, Wuling Indonesia’s new car sales reached 30,037, with a market share of 2.9%, an increase of 17%year -on -year.
With the effective implementation of the RCEP agreement, India and Indonesia will implement the agreement tax rate, automobile parts will enjoy zero tariffs in Indonesia, and SAIC -GM will get greater market opportunities and cost advantages.RCEP also helps to strengthen the integration of regional supply chains, help enterprises make full use of Indonesia’s resource advantages, optimize the local supply chain and reduce production costs.At the same time, RCEP also covers issues such as technical transfer and intellectual property protection, providing favorable support for enterprises to conduct more in -depth technical cooperation and service exchanges in the local area.
[1] RCEP has new potential for Economic and Trade cooperation in Indonesia to activate Indonesia and Indonesia:
[2] In 2023, India ’s investment in Asia increased by 37%:
[3] RCEP takes effect on Indonesia:
[4] RCEP Huiyao, China and Indonesia add new kinetic energy:
[5] RCEP Huiyao, China and Indonesia add new kinetic energy:
[6] RCEP’s new potential for Economic and Trade Cooperation in Indonesia and Indonesia in Effectiveness in Indonesia:
[7] RCEP Opportunities for Economic and Trade Cooperation with Indonesia and Indonesia in Indonesia:
This article was released by the Mumbai International Trade Promotion Committee, and it shall not be copied, reprinted, modified, extract or use without authorization.This article is only for providing the purpose of general information, and it is not used in consultation opinions provided by a substitute for professional consultants.The pictures in the text comes from the Internet.
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