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Trade Imbalance, Indonesia govt cautioned not to import from China

BhimYudhistira an economist, of BhimYudhistira Institute for Economic Economics and Finance (INDEF) has asked the Indonesian government to be more firm in opening imported faucets mainly from China. Bhima has also helped changing the orientation of Indonesia's cooperation with China which has tended to be lame. He says that the government's main problem with Indonesia's trade with China is supply chain imbalance.

According to Bhima, most of Indonesia's export products to China are raw products such as coal, CPO, and rubber. For the moment, China then exports finished materials with added value to Indonesia. The government is asked to provide incentives to local producers in order to compete with Chinese products. Not vice versa, where the incentive for import is actually multiplied.

Indonesia's trade balance trends continue to show a surplus until May 2017, but the numbers continue to be thinning. The Central Bureau of Statistics (BPS) recorded a trade surplus value in May 2017 of 470 million US dollars, down from the previous month's surplus of 1.33 billion US dollars. While the value of Indonesian imports in the same month was recorded at 13.82 billion US dollars, up 15.67 percent compared to April 2017.

BPS Deputy for Social Statistics Sairi Hasbullah says that the realization of Indonesia's imports since the beginning of 2017 to date was recorded at 52.32 billion US dollars, up 11.39 percent from last year's realization of 46.97 billion US dollars. Imports of consumer goods rose 11.78 percent, from 5.05 billion dollars to 5.64 billion dollars.

Meanwhile, imports of raw materials / auxiliary materials during January-May 2017 was recorded at 47.24 billion US dollars, up 17.63 percent from 40.16 billion US dollars last year. Meanwhile, capital goods imports stood at 9.48 billion dollars, up 9.13 percent from 8.69 billion dollars last year.

Japan occupies the second position as the country of origin of the largest imports with a value of 5.82 billion US dollars or 11.12 percent of all Indonesian imports. Followed by Thailand with import value 3.77 billion US dollars or 7.21 percent.