Chinese goods hurt Indonesian producers

Chinese goods hurt Indonesian producers. The Indonesian government has imposed safeguard measures such as antidumping duties to protect local products from cheap Chinese goods dumped into the domestic market, the Coordinating Minister for the Economy Hatta Rajasa said. He said that the safeguard and antidumping duties were needed because they were sold in Indonesia below production costs. Trade Minister Mari Pangestu said that anti-dumping duties and safeguard duties had been imposed on a number of Chinese products such as wire, iron, steel, textiles and garments. “Several other dumping cases are now under investigation,” she said, citing cases, among others, involving iron and steel products. Mari said the government had appointed the Indonesian Anti-Dumping Committee (KADI) and Indonesian Trade Safeguard Committee (KPPI) to monitor the implementation of the ASEAN-China Free Trade Agreement (ACFTA). The team would also investigate whether sales of Chinese products in Indonesia involve dumping practices. The Indonesian Chamber of Commerce (Kadin), however, said that the influx of Chinese goods following the implementation of the free trade agreement in January last year severely hurt local producers in most parts of the country. Although the Chinese products are mostly of lower quality, Indonesian consumers preferred buying them because of their low prices. Hatta said that the government did not have any plan to review the free trade agreement, despite the fact that it had hurt many local industries. He said that it would not be easy for Indonesia to review the free trade deal with China because it is part of a multi-trade agreement with other members of the Association of Southeast Asian Nations (ASEAN). Hatta said that the government would further strengthen monitoring of Chinese products to ensure that they were sold in Indonesia at fair prices. The Indonesian Central Statistics Agency (BPS) reported that the nation ran its largest international trade deficit with China last year. Although Indonesia booked an overall US$22 billion surplus in international trade in 2010, the country had a $5.6 billion bilateral trade deficit with China. Kadin chairman Suryo Bambang Sulisto has strongly urged the government to protect local industries from the influx of inexpensive Chinese products. “The government should protect domestic industries and their employees,” Suryo said. According to a survey by the Industry Ministry released last month, Indonesian products are losing ground in the domestic market to Chinese products following the implementation of the China-ASEAN agreement on Jan. 1, 2010. The survey, conducted in 11 major Indonesian cities, including Medan in North Sumatra, Padang in West Sumatra, Jakarta, Bandung in West Java, Semarang in Central Java, Surabaya in East Java and Makassar in South Sulawesi, revealed that the free trade agreement had led to declining sales of local products in the domestic market. According to the survey, textiles, furniture, metal, machinery and electronics producers suffered most. According to data provided by the ASEAN Secretariat, as the world’s third largest free trade area by gross national product (GDP), the China-ASEAN free trade area covered a combined GDP of $6.6 trillion, total trade of $4.3 trillion and a market of 1.9 billion people in 2008. Under the agreement, more than 7,000 products traded between China and six ASEAN countries – Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand – are duty-free.