Page 1 Page 1 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 11 THE ECONOMIC RELATIONS

S BETWEEN CHINA EKONOMI HUBUNGAN ANTARA CHINA AND INDONESIAAND MAINLAND CHINAS DAN Cina Daratan INDONESIAAND'S INVESTMENTS IN INDONESIA INVESTASI DI INDONESIA Lin Mei Mei lin I. Introduction I. Pendahuluan There are many literatures about the economic relation between China and ASEAN Ada banyak literatur tentang hubungan ekonomi antara China dan ASEAN which included the economic relation between China and Indonesia, major ones of yang mencakup hubungan ekonomi antara China dan Indonesia, yang utama which are as follows: 'the political economy of China's changing relations with yang adalah sebagai berikut: 'ekonomi politik yang berubah-ubah hubungan China dengan Southeast Asia' (Wong 1984), 'China-ASEAN economic relations: trades and patterns' Asia Tenggara '(Wong 1984),' China-ASEAN hubungan ekonomi: perdagangan dan pola ' (Cheng Bifan and Chia Siow-Yun 1988), 'China-ASEAN economic relations: (Cheng Bifan dan Chia Siow-Yun 1988), 'China-ASEAN ekonomi hubungan: development in China and ASEAN and their implications for ChinaASEAN pembangunan di China dan ASEAN dan implikasinya terhadap China-ASEAN economic relations' (Cheng Bifan and Chia Siow-Yun 1989), 'ChinaASEAN ekonomi hubungan '(Cheng Bifan dan Chia Siow-Yun 1989),' China-ASEAN economic relations: in the context of Pacific economic development and cooperation' hubungan ekonomi: dalam konteks pembangunan ekonomi Pasifik dan kerjasama ' (Cheng Bifan and Chia Siow-Yun 1991), 'China-ASEAN economic relations: (Cheng Bifan dan Chia Siow-Yun 1991), 'China-ASEAN ekonomi hubungan: industrial restructuring in ASEAN and China' (Luo Zhaohong and Chen Renhe 1995). restrukturisasi industri di ASEAN dan Cina (Luo Zhaohong dan Chen Renhe 1995). Besides books, some scholars had published papers on economic relation between Selain buku, beberapa sarjana telah menerbitkan makalah tentang hubungan ekonomi antara China and Indonesia such as Hadi Soesastro (1986), Raymond Atje and Arya B Gaduh China dan Indonesia seperti Hadi Soesastro (1986), Raymond Atje dan Arya B Gaduh (1999), Jusuf Wanandi (2001), and so on. (1999), Jusuf Wanandi (2001), dan seterusnya. 'The economic relations between China and Indonesia' is old academic studying field "Hubungan ekonomi antara China dan Indonesia 'sudah tua belajar bidang akademik on one hand, but it is always a new field attracting scholar's attention on the other hand. di satu sisi, tapi itu selalu merupakan bidang baru yang menarik perhatian sarjana di sisi lain. The economic relations between them have been in change with the change of politic Hubungan ekonomi antara mereka telah di ubah dengan perubahan politik and economy in these two countries and the change of regional and global relationship. dan ekonomi di kedua negara dan perubahan hubungan regional dan global. So it is always imperative to study the economic relation between China and Indonesia Jadi selalu penting untuk mempelajari hubungan ekonomi antara China dan Indonesia in response to the change of respective economy and international relationships. dalam menanggapi perubahan perekonomian masing-masing dan hubungan internasional. This Ini

paper will focus on four areas: 1) China's economic relations with Indonesia since kertas akan fokus pada empat bidang: 1) hubungan ekonomi China dengan Indonesia sejak 1950s; 2) the complementarity and competitiveness of economic relations between 1950-an, 2) yang saling melengkapi dan daya saing hubungan ekonomi antara China and Indonesia; 3) The impact of China's entry into WTO and establishment of China dan Indonesia; 3) Dampak's masuknya Cina ke dalam WTO dan pembentukan China-ASEAN free trade area on economic relation between China and Indonesia; 4) CinaASEAN kawasan perdagangan bebas pada hubungan ekonomi antara China dan Indonesia; 4) Chinese investment in Indonesia. Cina investasi di Indonesia. II. II. China's economic relations with Indonesia since 1950s Cina hubungan ekonomi dengan Indonesia sejak tahun 1950-an China and Indonesia finally became nation state after World War II , but followed China dan Indonesia akhirnya menjadi negara bangsa setelah Perang Dunia II, tetapi diikuti different social systems which put strong influence on economic relations between berbeda sistem sosial yang menempatkan pengaruh kuat pada hubungan ekonomi antara them. mereka. Together with the influence of international political regimes in the period of Bersama dengan pengaruh rezim politik internasional di masa Cold War, the economic relations between China and Indonesia had not been smooth. Perang Dingin, hubungan ekonomi antara China dan Indonesia tidak pernah mulus. Economic relations between Indonesia and China are closely related to the political hubungan ekonomi antara Indonesia dan Cina sangat erat terkait dengan politik relations between the two countries. hubungan antara kedua negara. As the political relations have been up and down, Karena hubungan politik telah naik dan turun, so have been the economic relations. sehingga telah menjadi hubungan ekonomi. Page 2 Page 2 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 22 China and Indonesia established diplomatic relations on 13 April 1950 and signed first China dan Indonesia menjalin hubungan diplomatik pada tanggal 13 April 1950 dan ditandatangani pertama bilateral trade agreement in 1953. perjanjian perdagangan bilateral pada tahun 1953. Afterward, the trade between them had been Setelah itu, perdagangan antara mereka telah increased, the total trade value between them increased from US$ 7.38 million in 1954 meningkat, nilai total perdagangan antara mereka meningkat dari US $ 7.380.000 pada tahun 1954 to US$ 129 million in 1959. untuk US $ 129 juta pada tahun 1959. Even in 1965, China once became the second trade partner Bahkan pada tahun 1965, Cina pernah menjadi mitra dagang kedua of Indonesia which Indonesian import and export value from China occupied 11 Indonesia yang impor Indonesia dan ekspor nilai dari China ditempati 11 percent of the total value of Indonesian import and export. persen dari total nilai impor Indonesia dan ekspor. But following the '30 Namun berikut '30 September' incident in 1965, the diplomatic relations between two countries were 'Insiden September pada tahun 1965, hubungan diplomatik antara kedua negara suspended in 1967. ditangguhkan pada tahun 1967. This had a significant negative impact on the economic relations Hal ini memiliki dampak negatif yang signifikan pada hubungan ekonomi

between Indonesia and China. antara Indonesia dan Cina. Direct trade link between them therefore stopped and Perdagangan langsung hubungan antara mereka itu berhenti dan indirect trade had been taken through Hongkong and Singapore. perdagangan tidak langsung telah diambil melalui Hongkong dan Singapura. Until 1980s, Relations Sampai tahun 1980-an, Hubungan between China and Indonesia began to ease. antara China dan Indonesia mulai mereda. In July 1985, the Indonesian Chamber of Pada bulan Juli 1985, Kamar Dagang Indonesia Commerce and the China Council for the Promotion of International trade (CCPIT) Perdagangan dan Dewan Cina untuk Promosi Perdagangan Internasional (CCPIT) signed a memorandum of understanding (MoU) for the reestablishment of a direct menandatangani nota kesepahaman (MoU) untuk pembangunan kembali langsung trade link between the two countries. perdagangan hubungan antara kedua negara. Five years later, it was on 8 August 1990 while Lima tahun kemudian, itu pada 8 Agustus 1990 sedangkan Premier Li Peng was visiting Indonesia, the Chinese and Indonesian foreign ministers Perdana Menteri Li Peng mengunjungi Indonesia, menteri luar negeri Indonesia dan Cina signed the Memorandum of Understanding on Restoration of Diplomatic Relations on menandatangani Nota Kesepahaman tentang Pemulihan Hubungan Diplomatik pada behalf of each of his own government, and declared Sino-Indonesian diplomatic nama masingmasing pemerintah sendiri, dan menyatakan Sino-Indonesia diplomatik relations was officially restored as of that day. hubungan secara resmi dikembalikan pada hari itu. After that, the political and economic Setelah itu, politik dan ekonomi relations between the two countries had been normalized, Sino-Indonesian relations hubungan antara kedua negara telah dinormalkan, hubungan Sino-Indonesia have seen all-round progress and developed rapidly. telah melihat semua kemajuan-bulat dan berkembang pesat. Average annual growth rate of Rata-rata laju pertumbuhan tahunan trade reached 14.7 percent during 1990-2000. perdagangan mencapai 14,7 persen selama 19902000. Entering 21st century, the relations Memasuki abad ke-21, hubungan between the two countries have been in best time. antara kedua negara telah di waktu terbaik. In May 2000, Foreign Minister Tang Pada bulan Mei 2000, Menteri Luar Negeri Tang Jiaxuan and Indonesian Foreign Minister Alwi Shihab signed in Beijing the Joint Jiaxuan dan Menteri Luar Negeri Indonesia Alwi Shihab ditandatangani di Beijing Bersama statement on the Course for Future Bilateral Cooperation between the People's pernyataan di Kursus untuk Masa Depan Kerjasama Bilateral antara Rakyat yang Republic of China and the Republic of Indonesia, and Memorandum of Understanding Republik Cina dan Republik Indonesia, dan Nota Kesepahaman on the Joint Committee of Bilateral Cooperation between the People's Republic of dalam Komite Bersama Kerjasama Bilateral antara Republik Rakyat China and Republic of Indonesia, which was the guideline of developing the relations China dan Republik Indonesia, yang merupakan pedoman pembinaan relasi between two countries in 21st century. antara dua negara di abad ke-21. This showed that the two countries reached Hal ini menunjukkan bahwa kedua negara mencapai consensus on establishing and developing all-round cooperative relations based on konsensus mengenai pembentukan dan pengembangan koperasi bulat hubungan-semua berdasarkan long-term stability, mutual trust and good neighbourliness. jangka panjang stabilitas, saling percaya dan bertetangga baik.

Overview the history of economic relations between China and Indonesia since the Sekilas sejarah hubungan ekonomi antara China dan Indonesia sejak establishment of diplomatic relations in 1950, the development of economic relations pembentukan hubungan diplomatik pada tahun 1950, pengembangan hubungan ekonomi between two countries may be divided into three stages: antara dua negara dapat dibagi menjadi tiga tahap: 1. 1. Slowly development in the period of 1950-1966. Perlahan-lahan pembangunan di periode 1950-1966. The trade relations between them Hubungan perdagangan antara mereka were characterised as small volume and simple structure of trade. yang dicirikan sebagai volume kecil dan struktur sederhana perdagangan. Table 1 Chinese trade with Indonesia during 1950-1966 (Unit: US$ ten thousand) Tabel 1 perdagangan Cina dengan Indonesia selama 1950-1966 (Unit: US $ 10.000) Year Tahun 1950 1955 1950 1955 1956 1960 1956 1960 1961 1965 1961 1965 1966 1966 Export Ekspor 11.75 11.75 206.28 206.28 236.99 236.99 0.33 0.33 Import Impor 22.56 22.56 191.98 191.98 225.20 225.20 16.39 16.39 Total Jumlah 34.31 34.31 398.26 398.26 462.19 462.19 16.72 16.72 Source: Almanac of China's Foreign Economic Relations Trade 1984. Sumber: Almanak Perdagangan Hubungan Ekonomi Luar Negeri China 1984. No Tidak ada official data of 1967-1976 data resmi dari 1967-1976 Page 3 Page 3 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 33 2. 2. Indirect trade through Hongkong and Singapore in the period of 1967-1984. Langsung perdagangan melalui Hongkong dan Singapura dalam periode 1967-1984. The The normal economic relations between China and Indonesia had been stopped for hubungan ekonomi normal antara China dan Indonesia telah berhenti untuk nearly 20 years because the diplomatic relations between two countries suspended hampir 20 tahun karena hubungan diplomatik antara kedua negara ditangguhkan

in 1967. pada tahun 1967. The trade between them took place in term of indirect trade through Perdagangan antara mereka berlangsung di jangka perdagangan tidak langsung melalui Hongkong and Singapore. Hongkong dan Singapura. In 1970s, about 30 percent of Indonesian import goods Pada 1970, sekitar 30 persen dari barang-barang impor Indonesia from Hongkong were made in China and 14 percent of Indonesian export goods to dari Hongkong dibuat di China dan 14 persen barang ekspor Indonesia ke Hongkong had been transferred to China at same time. Hongkong telah dipindahkan ke Cina pada waktu yang sama. Table 2 Chinese indirect trade with Indonesia via Hongkong during 1967-1984 Tabel Cina 2 perdagangan langsung dengan Indonesia melalui Hongkong selama 1967-1984 (Unit: million US dollar) (Unit: juta US dolar) Year Tahun 1978 1978 1979 1979 1980 1980 1981 1981 1982 1982 1983 1983 1984 1984 1985 1985 Import Impor 88 28 28 45 45 33 33 42 42 34 34 Export Ekspor 94 94 134 134 203 203 238 238 256 256 227 227 195 195 165 165 Total Jumlah 102 102 162 162 248 248 271 271 298 298 261 261 195 195 165 165

Source: Hongkong's Foreign Trade 197819791980198219841985. Sumber: Perdagangan Luar Negeri 197819791980198219841985's Hongkong. 3. 3. Restoration and rapidly development since 1985. Restorasi dan cepat pengembangan sejak tahun 1985. China and Indonesia finally China dan Indonesia akhirnya restored direct trade which ever suspended for nearly 20 years since 1967. kembali perdagangan langsung yang pernah diskors selama hampir 20 tahun sejak tahun 1967. The The economic relations between these two countries developed rapidly after the hubungan ekonomi antara kedua negara berkembang pesat setelah normalisation of diplomatic relation in 1990. normalisasi hubungan diplomatik pada tahun 1990. A. The economic relations between China and Indonesia in this period are A. hubungan ekonomi antara China dan Indonesia pada periode ini adalah characterized as follows: karakteristik sebagai berikut: The trade value between them has been steadily increasing. Nilai perdagangan antara mereka telah terus meningkat. We can see this Kita bisa melihat ini trend from below table. tren dari bawah meja. The trade value between China and Indonesia goes up Nilai perdagangan antara China dan Indonesia naik sharply since 1985 except in 1998 and 2001. tajam sejak tahun 1985, kecuali pada tahun 1998 dan 2001. According to the data of China, Menurut data dari Cina, Indonesia's trade with China by value increased nearly 100 times from US$ dagang Indonesia dengan Cina dengan nilai meningkat hampir 100 kali dari US $ 108.7 million in 1985 to US$10.2 billion in 2003 and is planed to reach US$ 15 108,7 juta pada tahun 1985 menjadi US $ 10,2 miliar untuk tahun 2003 dan direncanakan mencapai US $ 15 billion with Indonesia's trade surplus most of years. miliar dengan surplus perdagangan's Indonesia sebagian besar tahun. Table 3: The trade balance between China and Indonesia during 1985-2003 Tabel 3: Neraca perdagangan antara China dan Indonesia selama 1985-2003 (Unit: US$ million) (Unit: US $ juta) 11 Indonesian Statistics Statistik Indonesia Chinese Statistics Cina Statistik Years Tahun Total Jumlah Export Ekspor Import Impor Total Jumlah Export Ekspor Import Impor 1985 1985 333.1 333.1 84.2 84.2 248.9 248.9 108.7 108.7 69.0 69.0 39.7 39.7 1986 1986 476.1 476.1

139.0 139.0 337.1 337.1 285.0 285.0 102.2 102.2 182.8 182.8 1987 1987 751.0 751.0 343.0 343.0 408.0 408.0 432.2 432.2 142.1 142.1 290.1 290.1 1988 1988 930.5 930.5 491.8 491.8 438.7 438.7 522.7 522.7 170.4 170.4 352.3 352.3 1989 1989 1,095.9 1,095.9 568.5 568.5 527.4 527.4 441.9 441.9 141.9 141.9 300.0 300.0 1990 1990 1,486.8 1,486.8 834.4 834.4 652.4 652.4 545.7 545.7 220.0 220.0 325.7 325.7 1991 1991 2,025.9 2,025.9 1,190.9 1,190.9 835.0 835.0 1,884.5 1,884.5 481.1 481.1 1,403.4 1,403.4 1992 1992 2,147.9 2,147.9 1,396.4 1,396.4 751.5 751.5 2,025.7 2,025.7 471.4 471.4

1,554.3 1,554.3 1993 1993 2,114.0 2,114.0 1,250.0 1,250.0 864.0 864.0 2,160.3 2,160.3 691.7 691.7 1,468.6 1,468.6 11 This table shows there is big gap between Indonesia statistics and Chinese statistics because smuggling Tabel ini menunjukkan ada kesenjangan besar antara statistik Indonesia dan statistik Cina karena penyelundupan exists in Indonesia side. ada di sisi Indonesia. So the figures of Indonesia are smaller than that of China. Jadi tokoh Indonesia lebih kecil dibandingkan dengan Cina. Page 4 Page 4 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 44 1994 1994 2,690.7 2,690.7 1,321.7 1,321.7 1,369.0 1,369.0 2,640.1 2,640.1 1,051.7 1,051.7 1,588.4 1,588.4 1995 1995 3,137.0 3,137.0 1,641.8 1,641.8 1,495.2 1,495.2 3,490.2 3,490.2 1,438.2 1,438.2 2,052.0 2,052.0 1996 1996 3,655.1 3,655.1 2,057.5 2,057.5 1,597.6 1,597.6 3,708.4 3,708.4 1,428.0 1,428.0 2,280.4 2,280.4 1997 1997 3,747.3 3,747.3 2,229.3 2,229.3 1,518.0 1,518.0 4,514.2 4,514.2 1,840.6 1,840.6 2,673.6 2,673.6

1998 1998 2,738.2 2,738.2 1,832.0 1,832.0 906.2 906.2 3,627.9 3,627.9 1,171.2 1,171.2 2,456.7 2,456.7 1999 1999 3,251.1 3,251.1 2,008.9 2,008.9 1,242.2 1,242.2 4,829.8 4,829.8 1,778.9 1,778.9 3,050.9 3,050.9 2000 2000 4,789.6 4,789.6 2,767.7 2,767.7 2,021.9 2,021.9 7,463.9 7,463.9 3,061.9 3,061.9 4,402.0 4,402.0 2001 2001 4,043.4 4,043.4 2,200.7 2,200.7 1,842.7 1,842.7 6,724.6 6,724.6 2,836.5 2,836.5 3,888.1 3,888.1 2002 2002 5,330 5,330 2,903 2,903 2,427 2,427 7,928.3 7,928.3 3,426.9 3,426.9 4,501.4 4,501.4 2003 2003 6,760 6,760 3,803 3,803 2,957 2,957 10,229.0 10,229.0 4,481.0 4,481.0 5,748.0 5,748.0 Source: Almanac of China's Foreign Economic Relations Trade (Different Sumber: Almanak Perdagangan Hubungan Ekonomi Luar Negeri China (berbeda-beda Years), Statistics Indonesia (BPS) Tahun), Statistik Indonesia (BPS)

 In terms of commodity structure, China's principal export commodities to Dalam hal struktur komoditas, komoditas ekspor utama China ke Indonesia are industrial finished products and semi-manufactured goods and Indonesia adalah produk jadi industri dan barang semi-manufaktur dan some agricultural goods such as electrical machinery and apparatus, chemical pertanian beberapa barang seperti mesin dan peralatan listrik, kimia materials, tobacco, rice and maize, China's principal import commodities are bahan, tembakau, beras dan jagung, komoditas utama impor's China resource-intensive goods like crude oil, plywood, wood and its products, pulp, sumber daya intensif barang seperti minyak mentah, kayu lapis, kayu dan produk-produknya, pulp, rubber and chemical materials. karet dan bahan kimia. Of China's total exports to Indonesia, primary Dari total ekspor China ke Indonesia, primer commodities accounted for 23 percent and industrial finished products komoditas menyumbang 23 persen dan produk jadi industri accounted for 77 percent in 2001; by contrary, primary commodities accounted menyumbang 77 persen pada tahun 2001; oleh Sebaliknya, komoditas primer dipertanggungjawabkan for 51 percent and industrial finished products accounted for 49 percent of untuk 51 persen dan produk jadi industri menyumbang 49 persen dari China's total imports from Indonesia at the same year (Xu 2002). China total impor dari Indonesia pada tahun yang sama (Xu 2002). In engineering projects and labour services aspects, development is quick, but Dalam proyek rekayasa dan jasa tenaga kerja aspek, pembangunan cepat, tetapi value is still small. nilainya masih kecil. China and Indonesia began cooperation in this area in 1989 China dan Indonesia memulai kerjasama di daerah ini pada tahun 1989 and signed contract value of US$ 810 thousand in that year. dan menandatangani nilai kontrak sebesar US $ 810.000 pada tahun itu. Although contract Meskipun kontrak value of engineering projects and labour services between them have increased Nilai proyek rekayasa dan jasa tenaga kerja di antara mereka telah meningkat and even reached over US$ 100 million in some years, but most of years until dan bahkan mencapai lebih dari US $ 100 juta dalam beberapa tahun, tetapi sebagian besar dari tahun sampai now are below that level. sekarang di bawah tingkat itu. According to China's data, the total contract numbers Menurut's data Cina, jumlah kontrak sebesar of engineering project and labour service between China and Indonesia added proyek teknik dan jasa buruh antara China dan Indonesia ditambahkan up 1074 units with the accumulative contract value of US$ 988 million and the Facebook 1.074 unit dengan nilai kontrak akumulasi dari US $ 988.000.000 dan accumulative turnover of US$ 579 million until the end of 2002. akumulasi omset sebesar US $ 579.000.000 sampai akhir tahun 2002. 22 As Indonesia Seperti Indonesia estimated, the contract value of engineering projects for foreign countries is Diperkirakan, nilai kontrak proyek rekayasa untuk negara-negara asing adalah estimated about US$ 10 billion one year, but China only accounts for small diperkirakan sekitar US $ 10 miliar satu tahun, tetapi China hanya menyumbang kecil percentage of it. persentase itu. China's biggest engineering project was that Chinese ChengDa rekayasa proyek terbesar China adalah bahwa Cina Chengda

Engineering Corporation built 2030 kilowatt Cilacap power station in central Engineering Corporation dibangun 20 30 kilowatt Cilacap pembangkit listrik di pusat Jawa worth US$ 510 million beginning on 29 December, 2003. DKI senilai US $ 510.000.000 dimulai pada tanggal 29 Desember, 2003. At same year, Pada tahun yang sama, CHEC (China Huadian Engineering Company), one of the largest general CHEC (China Huadian Engineering Company), salah satu yang terbesar umum contractors in China's power sectors, signed an agreement on establishing about kontraktor dalam kekuasaan sektor China, menandatangani perjanjian pada pendirian tentang 30 power plants in java with Indonesia companies PT Dana Mulia Sukses and 30 pembangkit listrik di Jawa dengan perusahaan Indonesia PT Dana Mulia Sukses dan PT Radu Pratama. PT Radu Pratama. 22 calculated according Almanac of China's Foreign Economic Relations Trade (Different Years) dihitung sesuai Almanak Ekonomi Luar Negeri China Hubungan Perdagangan (Tahun berbeda) Page 5 Page 5 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 55 The cooperation between two countries in energy has made great progress. Kerjasama antara dua negara di bidang energi telah membuat kemajuan besar. The The Energy Forum has been set up in November of 2001, which shows the two Forum Energi telah ditetapkan pada bulan November tahun 2001, yang menunjukkan dua countries will deepen energy cooperation in future. negara akan meningkatkan kerjasama energi di masa depan. In September of 2002, Pada bulan September 2002, Indonesia signed a 25-year contract to supply US$ 8.5 billion worth of liquefied Indonesia menandatangani kontrak 25 tahun untuk memasok US $ 8.5 milyar cair natural gas (LNG) to China's Fujian province from the Tangguh LNG plant in gas alam (LNG) ke Fujian propinsi China dari pabrik LNG Tangguh Papua. Papua. CNOOC (China National Offshore Oil Corporation) will start building CNOOC (China National Offshore Oil Corporation) akan mulai membangun an LNG terminal in 2004, while the first LNG supply from Tangguh is terminal LNG tahun 2004, sementara pasokan LNG pertama dari Tangguh expected to arrive in Fujian by 2007. diharapkan tiba di Fujian pada 2007. The supply will amount to 2.6 million pasokan akan berjumlah 2,6 juta tons per year. ton per tahun. China provided credit worth US$ 0.4 billions for helping finance the China memberikan kredit senilai US $ 0,4 miliar untuk membantu membiayai construction of the cross-sea Suramadu bridge linking Java and the island of pembangunan laut silang jembatan Suramadu yang menghubungkan Jawa dan pulau Madura, double-track railroad connecting Cireborn-Kroya and the construction Madura, ganda rel kereta api menghubungkan Cireborn-Kroya dan konstruksi of 200 Megawatt Labuhan Angin power plant in Sibolga in 2002 (Setiogi 2003). Angin dari 200 Megawatt pembangkit listrik Labuhan di Sibolga pada tahun 2002 (Setiogi 2003). Moreover, China also provided Indonesia with export credit facility and grant Selain itu, China juga memberikan Indonesia dengan fasilitas kredit ekspor dan hibah

for food and medicine in 1998 and 1999 respectively. untuk makanan dan obat-obatan pada tahun 1998 dan 1999 masing-masing. Besides cooperation above mentioned, China and Indonesia have developed Selain kerjasama di atas disebutkan, Cina dan Indonesia telah mengembangkan cooperation in agriculture, forestry, fishing, mining, transportation, finance, tourism, kerjasama di bidang pertanian, kehutanan, perikanan, pertambangan, transportasi, keuangan, pariwisata, and other areas. dan bidang lainnya. In 2001, agriculture, fishing, energy, resource exploration, Pada tahun 2001, pertanian, perikanan, energi, eksplorasi sumber daya, infrastructure construction as well as tourism was set by both countries as key pembangunan infrastruktur serta pariwisata ditetapkan oleh kedua negara sebagai kunci sectors for economic cooperation. sektor-sektor kerjasama ekonomi. Mutual investment also will be the important investasi Reksa juga akan menjadi penting area to be developed by both sides in future and will be discussed in last part of this area yang akan dikembangkan oleh kedua belah pihak di masa depan dan akan dibahas dalam bagian terakhir ini paper. kertas. Generally speaking, the economic relations between China and Indonesia had been Secara umum, hubungan ekonomi antara China dan Indonesia telah steadily and all-roundly developed in past decades. terus dan semua-bulat-bulat dikembangkan di dekade terakhir. B. The reasons why the economic relations between China and Indonesia had been B. Alasan mengapa hubungan ekonomi antara China dan Indonesia telah steadily and all-roundly developed since 1985 are as follows. terus dan semua-bulat-bulat yang dikembangkan sejak tahun 1985 adalah sebagai berikut. Fist, international relations changed. Fist, hubungan internasional berubah. In 1950-70s, the world was in the period of Pada tahun 1950-70-an, dunia sedang dalam periode Cold War, conflict and rivalry are major terms of international relations. Perang Dingin, konflik dan persaingan adalah istilah-istilah utama hubungan internasional. ASEAN ASEAN countries treated China as a rival or threat in the middle of 1960 and the early of diperlakukan negara Cina sebagai saingan atau ancaman di tengah tahun 1960 dan awal 1970. 1970. With the improvement of relations between China and America after Dengan peningkatan hubungan antara Cina dan Amerika setelah American former president Nixon visiting China in 1972, ASEAN countries mantan Presiden Amerika Nixon berkunjung ke China pada tahun 1972, negara-negara ASEAN justified foreign policy toward China and tried to improve the relations with China. dibenarkan terhadap kebijakan luar negeri Cina dan berusaha meningkatkan hubungan dengan Cina. Especially, The Cold War lasting 40 years turned out to be over in the end of 1980s Terutama, Perang Dingin berlangsung 40 tahun ternyata menjadi lebih dari pada akhir 1980-an and the early of 1990s with the disintegration of former Soviet Union in 1991. dan awal 1990-an dengan disintegrasi Uni Soviet pada 1991. Therefore, the international relationship greatly changed, peace and development as Oleh karena itu, hubungan internasional sangat berubah, perdamaian dan pembangunan sebagai well as competition and cooperation replaced conflict and rivalry. sebagai persaingan baik dan kerjasama diganti konflik dan persaingan. Second, the foreign and domestic policy in China and Indonesia began to change Kedua, kebijakan luar negeri dan domestik di Cina dan Indonesia mulai berubah

respectively with the background of international relations above mentioned. masing-masing dengan latar belakang hubungan internasional tersebut di atas. China Cina began domestic economic reform (namely market economic reform) and carried mulai reformasi ekonomi dalam negeri (yaitu reformasi ekonomi pasar) dan dilakukan out outward-looking economic policy from 1978. keluar mencari kebijakan ekonomi-keluar dari 1978. Establishing friendly relations Membangun hubungan persahabatan with neighbour countries around China is included into China's import foreign dengan negaranegara tetangga di sekitar Cina termasuk ke dalam impor luar negeri Cina policy. kebijakan. Indonesia as a big country in Southeast Asia was in the nature of things Indonesia sebagai negara besar di Asia Tenggara dalam sifat hal Page 6 Page 6 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 66 considered by China as one of China's most import neighbours who should be dianggap oleh Cina sebagai salah satu yang paling impor tetangga China yang harus normalized bilateral political and economic relations. normalisasi hubungan politik dan ekonomi bilateral. During 1980s, Indonesia also Selama tahun 1980-an, Indonesia juga undertook significant economic policy changes in terms of deregulation or ekonomi melakukan perubahan kebijakan yang signifikan dalam hal deregulasi atau liberalization. liberalisasi. Indonesia pursued outward-looking and export substitution policy Indonesia mengejar mencari dan ekspor substitusi kebijakan luar instead of inward-looking and import substitution policy in the period of 'oil bukannya inwardlooking dan kebijakan substitusi impor dalam periode 'minyak prosperity'. kesejahteraan '. Trade contributed more and more to GDP in these two countries. Perdagangan menyumbang lebih dan lebih terhadap PDB di kedua negara. From Dari Indonesian perspective, China was also considered as having a large economic perspektif Indonesia, China juga dianggap sebagai memiliki besar ekonomi potential and could no longer be ignored. potensial dan tidak bisa lagi diabaikan. As Atje and Gaduh (1999) wrote: 'it was Sebagai Atje dan Gaduh (1999) wrote: "itu adalah in such political and economic environments in China as well as in Indonesia that dalam lingkungan politik dan ekonomi seperti di Cina maupun di Indonesia yang the rapprochement between the two countries took place'. itu pemulihan hubungan antara kedua negara berlangsung. The process began at the Proses ini dimulai di time when both countries were entering new phases of their respective economic saat kedua negara memasuki tahap baru dari mereka masing-masing ekonomi reforms. reformasi. The establishment of a direct trade between the two countries in 1985 and Pembentukan perdagangan langsung antara kedua negara pada tahun 1985 dan the improvement in economic relations between the two countries afterwards might perbaikan dalam hubungan ekonomi antara kedua negara setelah itu mungkin be regarded as parts of their efforts to integrate their economies with the emerging dianggap sebagai bagian dari upaya mereka untuk mengintegrasikan ekonomi mereka dengan munculnya global economy. ekonomi global. Third, the two countries pay more attention to develop their bilateral relation by Ketiga, kedua negara memberikan perhatian lebih untuk mengembangkan hubungan bilateral mereka dengan

means of frequently leader visit each other since establishment of diplomatic berarti pemimpin yang sering saling mengunjungi sejak berdirinya diplomatik relation in 1990. hubungan pada tahun 1990. Fourth, China's rapidly economic development provides the strength of economic Keempat, yang cepat ekonomi pembangunan China menyediakan kekuatan ekonomi relations between China and Indonesia with more opportunities. hubungan antara China dan Indonesia dengan lebih banyak kesempatan. With China's high Dengan China tinggi growth rate since 1980s, China enlarges demands for Indonesia products, resources, laju pertumbuhan sejak 1980-an, Cina membesar permintaan produk Indonesia, sumber daya, investment and economic cooperation on one hand, China's enterprises begin to investasi dan kerjasama ekonomi di satu sisi, Teman-perusahaan China mulai invest in Indonesia under the 'going out' policy on the other hand. berinvestasi di Indonesia di bawah 'akan' keluar kebijakan di sisi lain. III. III. The complementarity and competitiveness of economic relations Saling melengkapi dan daya saing hubungan ekonomi between China and Indonesia antara China dan Indonesia It is argued that the completmentarity of economic relations between China and Dikatakan bahwa completmentarity hubungan ekonomi antara China dan Indonesia is less than competitiveness of that (Atje and Gaduh 1999). Indonesia adalah kurang dari daya saing yang (Atje dan Gaduh 1999). They think Mereka berpikir Indonesia and China are developing economies, with more or less the same levels of Indonesia dan China mengembangkan ekonomi, dengan kurang lebih tingkat yang sama development, and lack economic complementarity that is necessary for extensive trade pembangunan, dan kurangnya komplementaritas ekonomi yang diperlukan untuk perdagangan ekstensif between them to take place. di antara mereka untuk mengambil tempat. So it is necessary to review this point from theoretically Jadi itu perlu untuk meninjau hal ini dari teoritis and practically. dan praktis. A. Theoretical Analysis A. Teoritis Analisis From one view of traditional trade theory----Factor Proportion Theory, difference of Dari satu pandangan teori tradisional perdagangan ---- Faktor Proporsi Teori, perbedaan factor endowment fundamentally results in international division and then international endowmen faktor fundamental hasil di divisi internasional dan kemudian internasional trade. perdagangan. Furthermore, the more difference of factor endowment, economic level and Selain itu, perbedaan lebih abadi faktor, tingkat ekonomi dan industrial structure between two countries, the more economic complementarity industri struktur antara kedua negara, ekonomi saling melengkapi lebih between them, and vice versa. antara mereka, dan sebaliknya. So it is easy to conclude that China and Indonesia lack Sehingga mudah untuk menyimpulkan bahwa Cina dan kurangnya Indonesia economic complementarity because Indonesia and China are developing economies komplementaritas ekonomi karena Indonesia dan Cina sedang mengembangkan ekonomi with more or less the same levels of development. dengan kurang lebih tingkat yang sama pembangunan. Nevertheless, Factor Proportion Namun demikian, Faktor Proporsi Theory only explains one of reasons why international trade happen, but not all. Teori hanya menjelaskan salah satu alasan mengapa perdagangan internasional terjadi, tetapi tidak semua. In fact, Bahkan,

some new trends appear in the process of economic globalization. beberapa kecenderungan baru muncul dalam proses globalisasi ekonomi. On one hand, Di satu sisi, production factors multiply. faktor produksi berkembang biak. Technology, information and system as new production Teknologi, informasi dan sistem sebagai produksi baru Page 7 Page 7 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 77 factors contributes more to production as well as traditional production factors such as faktor yang memberikan kontribusi lebih untuk produksi serta faktor-faktor produksi tradisional seperti earth, capital and labour; on the other hand, international flow of production factors bumi, modal dan tenaga kerja, di sisi lain, aliran internasional faktor produksi brings about transfer of comparative advantage internationally and intra-industry trade. membawa tentang transfer keunggulan komparatif internasional dan perdagangan intra-industri. Factor Proportion Theory only explains why inter-industry trade takes place, but Proporsi faktor Teori hanya menjelaskan mengapa antar-industri perdagangan terjadi, namun Intra-Industry Trade Theory explains why intra-industry trade happens. Intra-Industri Perdagangan Teori menjelaskan mengapa intra-industri perdagangan terjadi. Exchange of Pertukaran differentiated products and intermediate-products of same industry between two or membedakan produk dan intermediate-produk industri yang sama antara dua atau more countries is called as intra-industry trade. lebih banyak negara disebut perdagangan intraindustri. From the view of Intra-Industry Trade Dari pandangan Intra-Industri Perdagangan Theory, product differentiae and economy of scale are at the bottom of intra-industry Teori, produk differentiae dan ekonomi skala berada di bawah intra-industri trade. perdagangan. Furthermore, international trade also happens in the two countries with similar Selain itu, perdagangan internasional juga terjadi di kedua negara dengan yang serupa factor endowment, similar industry structure and similar economy. Faktor abadi, struktur industri serupa dan ekonomi serupa. Therefore, it is Oleh karena itu, possible to strengthen the economic complementarity of two countries with similar mungkin untuk memperkuat komplementaritas ekonomi dari dua negara dengan yang serupa factor endowment by means of enlarging intra-industry trade. Faktor abadi dengan cara memperbesar perdagangan intra-industri. Intra-Industry Trade Intra-Industri Perdagangan Theory as dynamic trade theory brings to light possibility that the two countries with Teori sebagai teori perdagangan dinamis membawa cahaya kemungkinan bahwa kedua negara dengan similar industry structure and factor endowment develop extensive trade, so do China struktur yang sama industri dan faktor endowment mengembangkan perdagangan yang luas, jadi jangan Cina and Indonesia. dan Indonesia. B. Practical Analysis B. Analisis Praktis Generally speaking, the economic complementarity of China and Indonesia are relative Secara umum, komplementaritas ekonomi Cina dan Indonesia relatif limited at present, but we can't conclude that they lack economic complementarity terbatas pada saat ini, tapi kita tidak dapat menyimpulkan bahwa mereka kurang komplementaritas ekonomi

which is necessary for extensive trade between them to take place. yang diperlukan untuk perdagangan yang luas antara mereka untuk mengambil tempat. In reality, there are Pada kenyataannya, ada intra-industry trades between them as well as inter-industry trade. intra-industri perdagangan antara mereka serta industri perdagangan antar. First, China and Indonesia have differences of factor endowment, so they have Pertama, Cina dan Indonesia memiliki perbedaan anugerah faktor, sehingga mereka memiliki economic complementarity. ekonomi saling melengkapi. China rich in population, resources and broad area of earth Cina kaya penduduk, sumber daya dan bidang yang luas bumi covering areas of tropics, subtropics, temperate zone and frigid zone. meliputi wilayah tropis, subtropis, zona sedang dan zona dingin. Indonesia is a big Indonesia adalah besar country in Southeast Asia and abounds with natural resources in agriculture, mineral, negara di Asia Tenggara dan berlimpah dengan sumber daya alam di bidang pertanian, mineral, forestry and ocean. kehutanan dan laut. They possess of different comparative advantage. Mereka memiliki keunggulan komparatif yang berbeda. The indicator of Indikator revealed comparative advantage in below table shows China's comparative advantage mengungkapkan keunggulan komparatif dalam tabel di bawah ini menunjukkan keunggulan komparatif China is on labour-intensive commodities and Indonesia's comparative advantage focus on ada diintensif komoditas tenaga kerja dan keunggulan komparatif Indonesia yang fokus pada resource-intensive commodities. sumber daya intensif komoditas. Table 4: Revealed comparative advantage (RCA) of China's and Indonesia's export Tabel 4: keunggulan komparatif Terungkap (RCA) dari China dan ekspor Indonesia commodities 1988 komoditas 1988 Oil, mineral and Minyak, mineral dan metal logam Agriculture Pertanian Processing Pengolahan Food Makanan Manufacture Pembuatan China Cina 0.5229 0.5229 0.7264 0.7264 0.7015 0.7015 1.0916 1.0916 Indonesia Indonesia 2.5299 2.5299 1.4995 1.4995 1.7842 1.7842 0.756 0.756 Agriculture- Pertanianintensive intensif Mineral- Mineral intensive intensif Labour- Buruhintensive intensif

Capital- Modalintensive intensif China Cina 0.7596 0.7596 0.5906 0.5906 3.4531 3.4531 0.6736 0.6736 Indonesia Indonesia 1.8748 1.8748 2.2167 2.2167 1.2559 1.2559 0.3705 0.3705 Source: NAPES. Sumber: NAPES. http://napes.anu.edu.au/nph/rcademo.html http://napes.anu.edu.au/nph/rcademo.html The revealed comparative advantage index of a country's given product category is Keunggulan komparatif mengungkapkan indeks yang diberi kategori produk itu sebuah negara defined as the quotient of two ratios. didefinisikan sebagai hasil bagi dua rasio. The numerator is the share of the product categorys pembilang adalah bagian dari kategori produk export in the country's total exports, while the denominator is the share of the worlds ekspor's total ekspor negara itu, sementara penyebut adalah bagian dari dunia itu total exports of the product category in the world's total exports of all products. total ekspor dari kategori produk di's total ekspor dunia dari semua produk. An index Indeks Page 8 Page 8 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 88 greater than unity in a particular product category 'reveals' that the country has a lebih besar dari kesatuan dalam kategori produk tertentu 'mengungkapkan' bahwa negara memiliki 'comparative advantage' in the production of that product category, whereas an index 'Keunggulan komparatif' dalam produksi dari kategori produk, sedangkan indeks smaller than unity 'reveals' that the country has a 'comparative disadvantage'. lebih kecil dari persatuan 'mengungkapkan' bahwa negara itu telah 'a komparatif' merugikan. As the Sebagai magnitude of an index becomes larger, its comparative advantage increases or its besarnya indeks menjadi lebih besar, meningkatkan keunggulan komparatif atau yang comparative advantage decreases, whichever the case may be. menurun keunggulan komparatif, mana yang mungkin terjadi. Other things being equals, Hal-hal lain yang sama, the larger is the index, the greater is the comparative advantage or the smaller is the semakin besar adalah indeks, semakin besar keunggulan komparatif atau yang lebih kecil adalah comparative advantage. keunggulan komparatif. We should caution the interpretation of the indices of revealed comparative advantage. Kita harus hati-hati penafsiran indeks keunggulan komparatif terungkap. They are calculated from actual export statistics of any given country and the Mereka dihitung dari statistik ekspor yang sebenarnya setiap negara dan corresponding export statistics for the world as a whole. statistik ekspor yang sesuai bagi dunia secara keseluruhan. As such they may reflect the Dengan demikian mereka dapat mencerminkan

underlying 'real' comparative advantages or disadvantages of the economy, but they may mendasari 'real' keunggulan komparatif atau kerugian ekonomi, tetapi mereka mungkin also reflect the success or failure to deploy its resources efficiently. juga mencerminkan keberhasilan atau kegagalan untuk mengerahkan sumber daya secara efisien. Moreover, changes in Selain itu, perubahan the indices over time may reflect the economy's success or failure in upgrading its indeks dari waktu ke waktu mungkin mencerminkan perekonomian keberhasilan atau kegagalan dalam melakukan upgrading dari production technology and its accumulation of human capital. teknologi produksi dan akumulasi modal manusia. The upgrading of Peningkatan kemampuan production technology depends not only on domestic research and development activities, teknologi produksi tergantung tidak hanya pada penelitian domestik dan kegiatan pembangunan, but also on direct importation of technology and technology transfer via foreign direct tetapi juga pada impor langsung teknologi dan transfer teknologi melalui asing langsung investment and the ability to have skilled manpower from other part of the world investasi dan kemampuan untuk memiliki tenaga terampil dari bagian lain dunia working and contributing in the economy. bekerja dan berkontribusi dalam perekonomian. A country may begin with absolutely zero Sebuah negara mungkin mulai dengan benar-benar nol level of export in electronic components. tingkat ekspor komponen elektronik. Yet, with a successful effort in attracting Namun, dengan upaya yang berhasil menarik export-oriented direct foreign investments in the electronic sector may catapult an berorientasi ekspor investasi asing langsung di sektor elektronik mungkin sebuah katapel economy into a significant player in the international electronic components market. ekonomi menjadi pemain signifikan dalam pasar komponen elektronik internasional. APEC study (1999) on RCA of each country in this region during 1980-1995 also APEC studi (1999) tentang RCA masing-masing negara di wilayah ini selama 1980-1995 juga indicated China's and Indonesia had different comparative advantage. ditunjukkan China dan Indonesia memiliki keunggulan komparatif yang berbeda. In the APEC Dalam APEC (1999) study, commodity exports are aggregated into four product categories, namely, (a) (1999) studi, ekspor komoditas dikumpulkan menjadi empat kategori produk, yaitu, (a) natural resource intensive products; (b) unskilled labour intensive products; (c) sumber daya alam produk intensif, (b) tenaga kerja tidak terampil produk intensif; (c) technology intensive products, and (d) human capital intensive products. teknologi intensif produk, dan (d) modal manusia produk intensif. 33 Indonesia had Indonesia telah a comparative advantage in natural resource intensive products, and it had a comparative keunggulan komparatif dalam sumberdaya intensif produk alami, dan mempunyai perbandingan disadvantage in unskilled labour-intensive products, technology intensive products, and kelemahan dalam produk padat karya tidak terampil, produk teknologi intensif, dan human capital-intensive products throughout the period. manusia padat modal produk sepanjang masa. Comparing to Indonesia, China Dibandingkan dengan Indonesia, Cina has obvious comparative advantage in the production of unskilled labour-intensive memiliki keunggulan komparatif yang jelas dalam produksi tenaga kerja tidak terampil karya products, technology intensive products, and human capital-intensive products produk, intensif produk teknologi, dan produk-produk padat modal manusia

throughout the period of 1980-1995. selama periode 1980-1995. Second, intra-industry trade between China and Indonesia had taken place and will Kedua, intraindustri perdagangan antara China dan Indonesia telah terjadi dan akan increase. meningkat. Grubel-Lloyd Index is often used as a major indicator measuring GrubelLloyd Index sering digunakan sebagai indikator utama pengukuran intra-industry trade. intra-industri perdagangan. Intra-industry trade between China and AEASN tended to widen Intra-industri perdagangan antara China dan AEASN cenderung untuk memperluas since 1990s, so did intra-industry trade between China and Indonesia (Wang Qin 2003). sejak tahun 1990-an, begitu pula industri perdagangan intra antara China dan Indonesia (Wang Qin 2003). Table 5 shows the continually increase of intra-industry between China and ASEAN Tabel 5 menunjukkan peningkatan terus intra-industri antara China dan ASEAN 33 Natural resource intensive products include food and live animals (chiefly for food); beverage and intensif sumber daya alam termasuk produk makanan dan binatang hidup (terutama untuk makanan); minuman dan tobacco; crude materials, mineral fuels; animal and vegetable oils; manufactured goods classified by tembakau, bahan mentah, bahan bakar mineral, hewan dan minyak nabati, barang-barang manufaktur diklasifikasikan oleh material such as leather, wood manufactures, pearls, precious stones, pig iron. bahan seperti kulit, kayu manufaktur, mutiara, batu berharga, pig iron. Unskilled labor-intensive products will include textile and textile products; manufactured goods like produk padat karya tidak terampil akan mencakup tekstil dan produk tekstil, barang-barang manufaktur seperti furniture, clothing, footwear, toy. furnitur, pakaian, alas kaki, mainan. Technology intensive products include chemicals; machinery and transport equipment; telecommunication intensif produk Teknologi meliputi bahan kimia, mesin dan peralatan transportasi; telekomunikasi equipment; office machines; computers; aircraft; scientific instruments. peralatan, mesin kantor, komputer, pesawat udara; instrumen ilmiah. Human capital-intensive products include dyes and paints; steel; paper; non-electrical parts, tools; padat modal produk Manusia termasuk pewarna dan cat, baja, kertas;-bagian non listrik, peralatan; watches and clocks; printed matters; musical instruments. jam tangan dan jam, barang cetakan, alat-alat musik. Page 9 Page 9 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 99 (including Indonesia). (Termasuk Indonesia). Additionally, China's entry into WTO and establishment of Selain itu, China masuk ke WTO dan pembentukan China-ASEAN FTA will promote increasing intra-industry trade between China and CinaASEAN FTA akan mendorong perdagangan intra-industri meningkat antara Cina dan Indonesia. Indonesia. It was proven by Balassa and Bauwens (1987) that intra-industry trade and Hal ini dibuktikan oleh Balassa dan Bauwens (1987) yang intra-industri perdagangan dan

joining regional economic organization like FTA are positive related. bergabung dengan organisasi ekonomi regional seperti FTA positif terkait. In other words, Dengan kata lain, the establishment of regional economic organization will contribute more to increase pembentukan organisasi ekonomi regional akan memberikan kontribusi lebih untuk meningkatkan intra-industry trade within this region. intra-industri perdagangan di kawasan ini. Table 5: Grubel-Lloyd Indices between China and five ASEAN countries 1993-2001 Tabel 5: Grubel-Lloyd Indeks antara China dan lima negara ASEAN 1993-2001 44 ASEAN-5 Singapore Philippine Malaysia ASEAN-5 Filipina Malaysia Singapura Thailand Thailand Indonesia Indonesia 1993 1993 0.36 0.36 0.38 0.38 0.27 0.27 0.29 0.29 --- --0.28 0.28 1994 1994 0.42 0.42 0.36 0.36 0.26 0.26 0.27 0.27 --- --0.24 0.24 1995 1995 0.41 0.41 0.39 0.39 0.26 0.26 0.31 0.31 --- --0.25 0.25 1996 1996 0.46 0.46 0.42 0.42 0.34 0.34 0.34 0.34 0.27 0.27 0.26 0.26 1997 1997 0.47 0.47 0.40 0.40 0.26 0.26 0.37 0.37 0.35 0.35

0.24 0.24 1998 1998 0.46 0.46 0.46 0.46 0.34 0.34 0.43 0.43 0.35 0.35 0.30 0.30 1999 1999 0.57 0.57 0.54 0.54 0.44 0.44 0.60 0.60 0.51 0.51 0.47 0.47 2000 2000 0.58 0.58 0.55 0.55 0.44 0.44 0.54 0.54 0.62 0.62 0.47 0.47 2001 2001 0.55 0.55 0.53 0.53 0.51 0.51 0.46 0.46 0.40 0.40 0.49 0.49 Third, steadily increase of foreign trade between China and Indonesia since 1985 Ketiga, terus meningkatkan perdagangan luar negeri antara China dan Indonesia sejak tahun 1985 strongly proves that the economic complementarity lies between them. sangat membuktikan bahwa komplementaritas ekonomi terletak di antara mereka. Of course, we can't deny the China-Indonesia economic competitiveness, which is Tentu saja, kita tidak dapat menyangkal China-Indonesia daya saing ekonomi, yang mainly on third country markets and attracting foreign investment. terutama pada pasar negara ketiga dan menarik investasi asing. IV. IV. The impact of China's entry into WTO and establishment of Dampak Entri Cina ke WTO dan pembentukan China-ASEAN free trade area on economic relations between China Cina-ASEAN kawasan bebas perdagangan pada hubungan ekonomi antara China and Indonesia dan Indonesia In an increasingly integrated world economy, it is utterly insufficient to analyze Dalam ekonomi dunia semakin terintegrasi, itu sama sekali tidak cukup untuk menganalisis China-Indonesia economic relations in isolation from the two countries respective ChinaIndonesia hubungan ekonomi di isolasi dari kedua negara masing-masing

relations with the rest of the world. hubungan dengan sisa dunia. China's entry into WTO and establishment China masuk ke WTO dan pendirian China-ASEAN FTA will affect the development of China-Indonesia economic Cina-ASEAN FTA akan mempengaruhi perkembangan ekonomi Cina-Indonesia relations. hubungan. A. The impact of China's entry into WTO on economic relations between China and A. Dampak's masuknya Cina ke WTO pada hubungan ekonomi antara China dan Indonesia Indonesia One word is often used to assess the impact of China's accession to WTO on ASEAN Satu kata yang sering digunakan untuk menilai dampak's aksesi China ke WTO di ASEAN and China that Challenges and opportunities coexist. dan Cina yang hidup berdampingan Tantangan dan peluang. The challenges for Indonesia Tantangan bagi Indonesia from China's entry into WTO may be generalized as three dimensions: 1) Chinas dari's masuknya Cina ke WTO dapat digeneralisir sebagai tiga dimensi: 1) China products compete in Indonesia domestic market. produk bersaing di pasar dalam negeri Indonesia. As a WTO member, China is entitled Sebagai anggota WTO, Cina berhak to enjoy the same rights as other WTO members, and Indonesia should provide with untuk menikmati hak yang sama sebagai anggota WTO lainnya, dan Indonesia harus menyediakan dengan same preference to China like open domestic market. sama preferensi ke Cina seperti pasar domestik terbuka. 2) China's products compete 2), produk Cina bersaing with Indonesia's products in third country market such as USA, Japan and EU. dengan produkproduk Indonesia di pasar negara ketiga seperti Amerika Serikat, Jepang dan Uni Eropa. USA, USA, 44 Zhao (2004). Zhao (2004). Page 10 Page 10 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 10 10 Japan and EU are the three major export markets of both China and Indonesia. Jepang dan Uni Eropa merupakan tiga pasar ekspor utama kedua Cina dan Indonesia. Chinas China products will enter these markets as other WTO members and compete with produk akan memasuki pasar ini sebagai anggota WTO lain dan bersaing dengan Indonesian products, especially those products which China has obvious comparative Produk Indonesia, terutama produk yang China telah jelas komparatif advantage such as unskilled labour-intensive products, technology intensive products, keuntungan seperti produk padat karya tidak terampil, intensif produk teknologi, and human capital-intensive products. dan produk manusia padat modal. 3) China will compete with Indonesia in 3) China akan bersaing dengan Indonesia dalam attracting FDI. menarik FDI. As we seen, FDI that flows to Indonesia had decreased sharply after Seperti yang kita lihat, PMA yang mengalir ke Indonesia mengalami penurunan tajam setelah Asian financial crisis because of Indonesia's bad political and economic environment. Krisis keuangan Asia karena buruk politik dan ekonomi Indonesia. Even until now, FDI outflow from Indonesia still happens. Bahkan sampai sekarang, arus keluar FDI dari Indonesia masih terjadi. According to Economic Menurut Ekonomi

Intelligence estimated, Indonesian domestic capital outflow reached about US$ 660 Intelligence memperkirakan, arus keluar modal dalam negeri Indonesia mencapai sekitar US $ 660 million and FDI outflow reached about US$ 57.9 billions during 2001-2003. juta dan keluar FDI mencapai sekitar US $ 57,9 miliar selama 2001-2003. 55 Some of Beberapa FDI outflow from Indonesia may turn to China, Vietnam, Cambodia and Myanmar. arus keluar FDI dari Indonesia dapat beralih ke Cina, Vietnam, Kamboja dan Myanmar. China's accession to WTO provides opportunities for Indonesia at the same time. Teman-aksesi China ke WTO memberikan kesempatan bagi Indonesia pada waktu yang sama. China is responsible to open its domestic market for WTO members and has mandate Cina bertanggung jawab untuk membuka pasar domestik bagi anggota WTO dan memiliki mandat to liberalize regulations related to trade and investment as it enjoys the rights, which untuk liberalisasi peraturan yang terkait dengan perdagangan dan investasi karena menikmati hak-hak, yang inevitably increase Indonesia exports and investment to China. pasti meningkatkan ekspor Indonesia dan investasi ke China. Fist of all, China should Fist dari semua, China harus cut import tariffs and eliminate non-tariff barriers. memotong tarif impor dan menghilangkan hambatan non-tarif. China promises average import Cina janji impor rata-rata tariff rate will be cut to 10 percent that is a little bit lower than average level of tarif akan dipotong sampai 10 persen yang sedikit lebih rendah dari tingkat rata-rata developing countries by 2005. negara-negara berkembang pada tahun 2005. From 1 January 2002, China began to cut average Sejak 1 Januari 2002, China mulai memotong rata-rata import tariff rate from 15.3 percent to 12 percent with covering 5300 products. tarif impor dari 15,3 persen menjadi 12 persen dengan 5300 yang meliputi produk. Of Dari them, import tariff rates of seafood, crude oil and petroleum products refined, wood, mereka, tingkat tarif impor makanan laut, minyak mentah dan produk minyak olahan, kayu, paper and articles of paper, chemical products, electronic products had been cut by 25 kertas dan barang dari kertas, produk kimia, produk elektronik telah dipotong oleh 25 percent. persen. Those products are Indonesia major exports to China. Mereka produk utama ekspor Indonesia ke China. Without question, it Tanpa pertanyaan, itu would enlarge Indonesia exports to China. akan memperbesar ekspor Indonesia ke China. Secondly, the openness of all sectors, Kedua, keterbukaan dari semua sektor, especially service sectors, and liberalization of economy will enlarge mutual sektor jasa khususnya, dan liberalisasi ekonomi akan memperbesar saling investment and economic cooperation between China and Indonesia. investasi dan kerjasama ekonomi antara China dan Indonesia. In addition, China's entry into WTO has one meaning beyond economy for Indonesia. Selain itu,'s masuknya Cina ke dalam WTO memiliki satu arti luar ekonomi untuk Indonesia. It is that China's membership may improve their bargaining power as a developing Hal ini yang keanggotaan China mungkin meningkatkan daya tawar mereka sebagai berkembang country vis--vis developed countries (Atje and Guduh 1999) and struggle more negara vis--vis negara-negara maju (Atje dan Guduh 1999) dan perjuangan lebih benefits for developing countries. manfaat bagi negara-negara berkembang. In fact, China's entry into WTO provides challenges and opportunities not only for Bahkan,'s masuknya Cina ke dalam WTO memberikan tantangan dan peluang tidak hanya untuk

Indonesia, but also for China. Indonesia, tetapi juga untuk China. In order to reduce challenges from China's entry into Dalam rangka mengurangi Entri tantangan dari Cina ke WTO for China and ASEAN and reinforce China's and ASEAN's competitive WTO untuk China dan ASEAN dan memperkuat China dan ASEAN kompetitif capacity in the process of globalization, China and ASEAN finally agreed to set up kapasitas dalam proses globalisasi, Cina dan ASEAN akhirnya sepakat untuk mengatur China-ASEAN FTA within 10 years in 2002. Cina-ASEAN FTA dalam waktu 10 tahun pada tahun 2002. B. The impact of establishment of China-ASEAN FTA on economic relations between B. Dampak pendirian Cina-ASEAN FTA pada hubungan ekonomi antara China and Indonesia China dan Indonesia Theoretically speaking, FTA will benefit member countries by means of two ways: Secara teori, FTA akan menguntungkan negara-negara anggota melalui dua cara: static effect like trade creation and dynamic effect like enhancing labour productivity efek statis seperti penciptaan perdagangan dan efek dinamis seperti meningkatkan produktivitas tenaga kerja and accumulating capital. dan mengumpulkan modal. FTA between China-ASEAN not only includes liberalizing FTA antara China-ASEAN tidak hanya mencakup liberalisasi trade, but also includes the liberalization of technology and investment and economic perdagangan, tetapi juga mencakup teknologi dan liberalisasi investasi dan ekonomi cooperation. kerjasama. So China and ASEAN FTA will take positive effects on GDP and welfare Jadi Cina dan ASEAN FTA akan membawa dampak positif terhadap PDB dan kesejahteraan 55 Capital outflow will reach US$ 368 million this year , International Daily (Indonesia), 15 May 2004. Modal keluar akan mencapai US $ 368.000.000 tahun ini, International Harian (Indonesia), 15 Mei 2004. Page 11 Page 11 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 11 11 of China and Indonesia as well as their trade. Cina dan Indonesia serta perdagangan mereka. The simulations conducted by the ASEAN Secretariat using the Global Trade Analysis Simulasi yang dilakukan oleh Sekretariat ASEAN dengan menggunakan Analisis Perdagangan Global Project (GTAP version 4) suggest that an ASEAN-China FTA will increase ASEANs Proyek (GTAP versi 4) menunjukkan bahwa FTA ASEAN-China akan meningkat ASEAN exports to China by 48 percent and China's exports to ASEAN by 55.1 percent. ekspor ke Cina sebesar 48 persen dan Ekspor China untuk ASEAN oleh 55.1 persen. Among the ASEAN countries, the biggest gainers in exports are Singapore, Malaysia, Di antara negara-negara ASEAN, diuntungkan terbesar di ekspor adalah Singapura, Malaysia, Thailand and Indonesia, whose export value rises by US$ 36.39 billions, 32.07 billions, Thailand dan Indonesia, yang nilai ekspor meningkat sebesar US $ 36,39 miliar, 32.07 miliar, 29.07 billions and 26.56 billions respectively. 29,07 miliar dan 26,56 miliar masing-masing. The biggest gainers for ASEAN by Terbesar diuntungkan untuk ASEAN oleh sectors are textiles and apparel, electrical appliances and machinery and other sektor-sektor tekstil dan pakaian jadi, peralatan listrik dan mesin dan lainnya

manufactures. manufaktur. Indonesia's exports of other manufactures to China will rank first which Ekspor Indonesia lainnya manufaktur ke China akan peringkat pertama yang rise by US$ 1.3 billions. meningkat US $ 1,3 miliar. At same time, the biggest gainers for China are also textiles Pada saat yang sama, diuntungkan terbesar bagi China juga tekstil and apparel, electrical appliances and machinery and other manufactures. dan pakaian jadi, peralatan listrik dan mesin dan lainnya manufaktur. Chinas China exports of other manufactures to Indonesia also rank fist which rise by 528 million. ekspor lainnya manufaktur untuk Indonesia juga peringkat tinju yang naik sebesar 528.000.000. Table 6: Changes in exports and GDP with China-ASEAN FTA Tabel 6: Perubahan ekspor dan PDB dengan China-ASEAN FTA 66 GDP (US$ million) GDP (US $ juta) Exports Ekspor (US$ million) (US $ juta) Absolute increase Absolute meningkatkan Percentage (%) increase Persentase (%) meningkatkan China Cina 2656.09 2656.09 2214.9 2214.9 1.12 1.12 Indonesia Indonesia 1371.60 1371.60 2267.8 2267.8 0.27 0.27 Another simulation conducted by Chinese Professor Zhang Bowei and Li kungwang Hasil simulasi lainnya yang dilakukan oleh Cina Profesor Zhang Bowei dan Li kungwang (2003) using GTAP version 5 and Computable General Equilibrium(CGE) made same (2003) menggunakan versi GTAP 5 dan Komputasi Keseimbangan Umum (CGE) yang dibuat sama conclusion that all members countries including China and Indonesia can get positive kesimpulan bahwa semua negara anggota termasuk Cina dan Indonesia bisa mendapatkan positif benefit in trade, GDP and welfares. manfaat dalam perdagangan, PDB dan kesejahteraan. The removal of trade and investment barriers will certainly lower transaction costs, Penghapusan hambatan perdagangan dan investasi akan biaya transaksi yang lebih rendah tentu, raise economic efficiency, upgrade product quality, increase economies of scale and meningkatkan efisiensi ekonomi, kualitas produk upgrade, peningkatan skala ekonomi dan scope etc. All of these will help improve external competitiveness in third country ruang lingkup dll Semua ini akan membantu meningkatkan daya saing eksternal di negara ketiga market. pasar. The (net) trade creation effects could be substantial, and so are the bigger The) perdagangan efek penciptaan bersih (bisa besar, dan demikian pula lebih besar flows of trade-related investment arus investasi yang berhubungan dengan perdagangan Productive activities and industries will have to upgrade and move on to a different kegiatan produktif dan industri akan harus meng-upgrade dan beralih ke yang berbeda level of comparative advantage through comprehensive trade and investment tingkat keunggulan komparatif - yang komprehensif melalui perdagangan dan investasi liberalization and, on the other hand, through economic growth, social development liberalisasi dan, di sisi lain, melalui pertumbuhan ekonomi, pembangunan sosial

and a rising standard of living over time. dan standar hidup meningkat dari waktu ke waktu. Such a movement will make room for others Gerakan seperti ini akan membuat ruang untuk orang lain to fill up the vacant economic space. untuk mengisi ruang ekonomi kosong. In one words, China-ASEAN FTA is a win-win arrangement that will benefit China Dalam satu kata, China-ASEAN FTA adalah pengaturan menang-menang yang akan menguntungkan Cina and Indonesia as a whole. dan Indonesia secara keseluruhan. One thing should be mentioned here that some sectors and Satu hal yang perlu disebutkan di sini bahwa beberapa sektor dan enterprises will face big challenges and even suffer loses like textiles and shoes in short perusahaan akan menghadapi tantangan besar dan bahkan menderita kehilangan seperti tekstil dan sepatu di singkat term, but this is just results of FTA. panjang, tapi ini hanya hasil dari FTA. During the process of FTA, reasonable Selama proses FTA, wajar intra-industry division in those sectors after competing each other will form finally intra-industri divisi di sektor tersebut setelah bersaing satu sama lain akan membentuk akhirnya with torture. dengan penyiksaan. 66 ASEAN-China Export Group on Economic Cooperation (2001: 150152). ASEAN-China Ekspor Kelompok Kerjasama Ekonomi (2001: 150-152). Page 12 Page 12 Draft Only Not for Citation Draft Hanya - Bukan untuk Kutipan 12 12 China's entry into WTO and FTA between China and ASEAN are positive response Entri Cina ke WTO dan FTA antara China dan ASEAN adalah respon positif for China and ASEAN to face the challenges from economic globalization. It will be Ini akan helpful to develop economic relations between China and Indonesia in long run. As for Adapun China and Indonesia respectively, it is clear that they need to formulate a strategic response to challenges and find niches, complementary opportunities and benefit from China's entry into WTO and FTA between China and Indonesia. V. Mainland China's investments in Indonesia Although the economic relations between China and Indonesia had made big progresses comprehensively in last decades, bilateral trade had been occupied big portion and mutual investment remains relative small in the size of their economic relations, nay, developed non-symmetrical. Indonesia's investments in China are nearly 20 times more than China's investments in Indonesia. Indonesia began investing in China in 1984. According to Chinese government statistics, Indonesia's investments in China totalled up to 970 contract numbers with contract value of US$ 2.024 billions till March of 2003. On the other hand, China has opened in Indonesia 60 non-trading joint ventures and enterprises under joint management, with their investment totalling US$ 0.27 billions, which Chinese investments reach US$ 0.163 billions till March 2003 including 18 service enterprises with value of US$ 0.105 billions, 39 processing enterprises with value of US$ 34.92 million, and 3 fishing enterprises with value of US$ 23.31 million (Ministry of Commerce of the People's Republic of China 2004). Total Chinese investments this year is about US$ 1.5 billion. Previously, it was only US$ 300 million. 77

In June of 1996, the Chinese People's Insurance Company opened a branch in Jakarta. In April of 2003, Bank of China reopened its branch and business in Jakarta. Jakarta. China's investments in Indonesia are mainly resources-oriented and market-oriented investments. investasi. 88 For China, Indonesia are natural resources supplier and big potential market because Indonesia is with 0.21 billion populations and abundant in natural resources such as oil and gas, mineral, wood, palm oil and so on which are badly needed by China. China is more and more shortage of natural resources with rapidly economic growth. pertumbuhan ekonomi. Petroleum, in particular, is becoming a cause for concern. China'soil consumption last year hit 245 million tones, making it the world's second biggest consumer of oil after America. In 2020, it is expected to become the world'sbiggest oil importer, with foreign oil resources making up 60 per cent of its total consumption. To Untuk supplement its diminishing resources, China should look towards South-east Asia, a precious land where China can obtain rich resources. Indonesia, for instance, has rich mineral and forest resources, as well as oil reserves amounting to about 120 billion barrels. In resources-oriented investments aspect, there are huge mainland Chinas invests in oil and gas exploration. CNOOC Ltd is a state-owned China National Offshore Oil Corp., China's third largest oil producer after No.1 PetroChina and No.2 Sinopec. In January of 2002, CNOOC, which has been expanding aggressively outside China, inked its largest overseas deal worth $585 million for the Indonesian oil 77 Indonesia: Tempo , no.46/IV/ 20-26 July 2004. 88 Zhan Xiaoning, a senior official in investment with UNCATD, classifies Chinese overseas investment as four types: :resource-oriented, market-oriented, efficiency-oriented and technology-oriented investment. investasi. Page 13 Page 13 Draft Only Not for Citation 13 13 operations of Spain'sRepsol-YPF. It makes CNOOC the largest offshore oil producer in Indonesia. di Indonesia. In February of 2004, CNOOC succeeded in buying 20.77 percent of British BG's shares in Muturi Ltd at price of US$ 9.81 million and CNOOC became the biggest stockholder of Muturi Ltd whose share in Mutri Ltd rose from 44.0 percent to 64.77 percent and whose share in Tangguh LNG plant in Papua rose from 12.5 percent to 16.96 percent. 99 In April of 2002, China's largest oil company, PetroChina made its first overseas purchase in Indonesia worth $216 million for American Devon Energy Corp.'soil and gas operations in the country. So the increase in investment in recent years has taken place in the oil and gas sectors, valued at about US$ 1 billion. In Dalam market-oriented investments aspect (in terms of processing manufacture), mainland

China's light industry such as household electrical appliances and motorcycles faces big challenge of relative overcapacity of productivity, but has strong competitiveness in terms of price. These enterprises have to find foreign markets to satisfy their overcapacity and Indonesia is just suitable market. For instance, in electronic sector, many well-known brands in China, like Cang Hung, Kang Cia and TCL, are marketed and invest in Indonesia. Bicycle manufacturers have also opened spare parts plants in Indonesia, like Jia Ling, Lif Fan, Chen Zhen and Pian Ma. Indonesian-Chinese businessmen welcome investments from China and want to play important role in the process of China's investment in Indonesia. Overseas ethnic Chinese who attended The Third Overseas Chinese Forum Worldwide 10 10 held in Beijing on 15-18 July 2004 expressed their willing that they want to act as a good partner and play bridge role in establishment of China-ASEAN FTA and in the process of Chinese enterprises 'going out'. Famous Chinese-Indonesians like Mr. Lin Wenjing (president director of SALIM GROUP), Mr. The Ning King (Chairman of ARGO MANUNGGAL GROUP) and Mr. Alim Markus (president director of MASION GROUP) attended this forum. Mr. Lin Wenjing made a speech on Ethnic Chinese businessmen Advantages in the Process of Establishment of China-ASEAN FTA. He Dia said that ethnic Chinese businessmen posses four advantages as follows: first, having strong economic capacity; second, having deep influence in local and internal; third, interested in taking part in FTA; fourth, having more experience in domestic and international investment. In fact, many overseas Chinese businessmen invest in mainland of China in one hand and act as cooperate partner of China's enterprises in Indonesia. Indonesia. For instance, MASION GROUP once built a plant in hometown Fujian province, and established three joint ventures that are Pt. Shanghai Masion Oleo Chemical Industry, PT. Shanghai Masion Tooth Paste Industry and PT. Shanghai Menculik Maspion Printing Ink Industry with Chinese enterprises. To succeed in overseas market, Mr. Oei Hong Leong suggested five steps for Chinese firms to take: establish a domestic presence first as a back-up; groom daring and visionary corporate leaders; seek overseas partners, cooperate with other Chinese firms instead of engaging in price wars; and integrate the efforts of overseas Chinese firms locally when Chinas investments go out abroad (Chan 2004). Although Chinese investment in Indonesia is still small, it is tendency to increase. That Itu 99 Indonesia: International Daily , 4 February 2004, C2. 10 10 The Third Overseas Chinese Forum was jointly organized by the Overseas Chinese Affairs Office of the State Council and the Chinese Overseas Exchanges Association. Page 14 Page 14 Draft Only Not for Citation 14 14 is because: 1) apart from the need for resources, Chinese firms may promote cooperation with Indonesian counterparts in the areas of agriculture, technology,

finance, communications, trade and services. As UNCATED stated, China is not only a major receiver of foreign direct investment but also is gradually turning into an exporter of capital. Statistics from UNCATD show that China's direct overseas investment exceeded US$ 35 billion in 2003, covering more than 160 countries and regions. daerah. 2) China's openness enters a new stage that the model of capital flow changes from single-way inflow of capital to double-way flow of Capital. Moreover, China are upgrading its industrial structure and integrate its economy into globalization, more and more enterprises including state-owned and private enterprises go abroad to investment for seeking resources, market, efficiency. 3) The establishment of China-ASEAN FTA will be helpful to promote China's investment in Indonesia. FTA FTA requires member countries to simplify FDI application and liberalize FDI system. It Ini makes mutual investment between China and Indonesia easier and increase. 4) 4) Indonesia begins to pay more attention to attract China's investments. Indonesia will Indonesia akan host a trade fair in Beijing from 30 August to 3 September in 2004. The five-day event will focus on Indonesian enterprises that work in sectors including oil, gas, mining, tourism, agriculture, fishery and papermaking. It is worth to note for China's investments that there are many obstacles in Indonesia that are political uncertainty, labour law, corruption, lagging infrastructure. Labour law Hukum Perburuhan and corruption, in particular, are be strongly blamed by Indonesia entrepreneurs and foreign entrepreneurs, which is one reason why FDI in Indonesia transfer to invest in other countries. negara lainnya. In addition, China should pay attention to the negative impact on Indonesian Chinese enterprises during the process of strengthening the economic relations between China and Indonesia and FTA between China and ASEAN. When Chinese products, mainly labour-intensive products like shoes, apparel and home appliance, pour into Indonesian market, it may make some enterprises close and workers loose their jobs. Now we can hear many voices from Indonesia that China's products have flooded in Indonesia and complain about their low quality. Any way, mutual investment between China and Indonesia will be more and more import in the economic relations between two countries. VI. VI. Conclusion Kesimpulan The relation between China and Indonesia is always an up to date topic for scholars. The economic relations between China and Indonesia had not been smooth since diplomatic relation first set up in 1950. The economic relations between two countries experienced three stages, namely slowly development in the period of 1950-1966, indirect trade in the period of 1967-1984 and restoration and rapidly development from 1985 to up to now. The trade between China and Indonesia includes not only inter-industry trade but also intra-industry, and intra-industry trade is tendency to increase. The trade value between two countries is rising rapidly since 1990. Moreover, mutual investment, engineering Page 15 Page 15 Draft Only Not for Citation 15 15

project and labour service, tourism and economic cooperation in agriculture, energy, infrastructure and resource exploration between them have been increasing. There are Ada large potency for China and Indonesia to develop bilateral economic relations. China's access to WTO and the establishment of China-ASEAN FTA are two important events that exert big impact on China, Indonesia and their economic relations. hubungan. The positive impact of these two events on China-Indonesia' economic relations is more than the negative impact of that in long term. Moreover, Chinas access to WTO and the establishment of China-ASEAN FTA bring about opportunities as well as challenges. China's investment in Indonesia is so far lower than Indonesia's investment in China, but it appears rapidly developing trend. China's capital outflow is the result that Chinese economic development enters into a new stage and China integrates itself into economic globalization. globalisasi. Chinas investments investasi in di Indonesia Indonesia are adalah mainly terutama resources-oriented and market-oriented investments. Chinese-Indonesian businessmen welcome investment from China and want to play important role in the process of China's investment in Indonesia. References Referensi ASEAN-China Expert Group on Economic Cooperation (2001) 'Forging closer ASEAN-China economic relations in the twenty-first century'. Online. Online. Available HTTP: http://www.aseansec.org/newdata/asean_chi.pdf (accessed 15 October 2004). Oktober 2004). Asia Pacific Economic Cooperation (1999) 'Aspects of market integration in APEC: trade, foreign direct investment and labor migration', APEC Economic Committee, APEC Secretariat, Singapore. Online. Online. Available HTTP: http://www.apecsec.org.sg (accessed 1 November 2004). Atje, Raymond and Gaduh, Arya B (1999) 'Indonesia-China economic relations: an Indonesian perspective', Centre for Strategic and International Studies Working Paper. Kertas. Online. Online. Available HTTP: http://www.csis.or.id/working_paper_file/13/wpe052.pdf (accessed 15 October 2004). Balassa, B. and Bauwens, L. (1987) 'Intra-industry trade specialization in a muti-country and multi-industry framework', Economic Journal , 97. Chan, Fiona (2004) 'Oei tells China firms to venture abroad', The Straits Times , 19 July 2004. Juli 2004. Online. Online. Available HTTP: http://straitstimes.asia1.com.sg/eyeoneastasia/story/0,4395,262241,00.html (accessed 15 October 2004). Cheng, Bifan and Chia, Siow-Yue (1988) China-ASEAN Economic Relations: Trades and Patterns , Beijing: Chinese Social Science Press. Cheng, Bifan and Chia, Siow-Yue (1989) China-ASEAN Economic Relations:

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