BKPM to Form Special Desk for Boosting Investment from China

Oleh Yura Syahrul 1 March 2016

The language barrier and unsuitable local partners are just two reasons that investment from China in Indonesia is lower than expected.

KATADATA | Arief Kamaludin

KATADATA - With investment from China in Indonesia lower than expected, the Investment Coordinating Board (BKPM) is set to work together with the Embassy of China to form special desk for increasing the amount of investment from China.

BKPM Head Franky Sibarani said that although the investment commitment from China from 2010 to 2015 was US$ 22 billion, the actual investment was only 14 percent of that figure. 

Franky and BKPM Deputy of Investment Planning Tamba Hutapea will be in charge of this special desk.

Franky believes there are two factors contributing to the low level of actual investment from China. First, there is a language barrier, which can complicate the investment process. Employees from the Embassy of China should help to resolve this problem. 

Second, investors from China tend to cooperate with unsuitable local partners. To overcome this problem, the BKPM is going to coordinate with the China Chamber of Trade and Industry to identify the most relevant partners and investment locations.

Franky mentioned that the BKPM could help several industrial firms from China that are planning to invest large sums of money in Indonesia. These include smelter developments in Mempawah (West Kalimantan) and Morowali (Central Sulawesi). 

Chairman of the China Chamber of Trade and Industry for Indonesia, Zhang Min, confirmed that communication between the two nations must be intensified so that investment potentials could be increased. He also hoped improvements on the investment climate in Indonesia would attract more direct investment from China to Indonesia. 

Zhang also said that China had actually invested more in Indonesia than recorded by the BKPM. Firms from China place their investments through Singapore-based companies.

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