In early 2024, Indonesia’s exports to China showed a significant increase of 15% compared to the previous period. The Indonesian Ministry of Trade (Kemendag) is optimistic that this growth will continue, driven by various initiatives and cooperation that have been planned between the two countries.
Background of Export Increase
China remains Indonesia’s main trading partner, accounting for nearly a quarter of the country’s total exports. In 2023, Indonesia’s exports to China were valued at around US$60 billion, and are expected to increase to between US$65 and US$70 billion by 20241. This is in line with a cooperation program known as the “Two Countries Twin Park”, which aims to promote Indonesian products in the Chinese market, particularly in the provinces of Fujian and Guangdong.
Supporting Factors
Some factors that support this increase in exports include:
- Increasing Demand: Demand for non-oil and gas products from Indonesia, such as nickel, coal, and agricultural products, continues to increase in the Chinese market.
- Product Diversification: Government efforts to expand the types of products exported to China, including processed products and consumer goods.
- Economic Stability: Despite challenges in the global economy, Indonesia’s domestic economic stability helps drive export performance.
Challenges Faced
Despite the increase, the export sector also faces challenges. In the first quarter of 2024, there was a decline in the value of exports to China by US$3.09 billion, triggered by the weakening economy in China and the decline in global commodity prices2. Commodities such as coal and palm oil experienced a decrease in demand, which had an impact on the total export value.
Future Prospects
With various new programs and initiatives planned for 2024, the government hopes to maintain the positive trend in exports to China. Didi Sumedi, Director General of National Export Development at the Ministry of Trade, emphasized the importance of collaboration between the public and private sectors to maximize the potential of the Chinese market.
Conclusion
Indonesia’s exports to China increased by 15% in early 2024, showing great potential in trade relations between the two countries. With support from the government and industry players, it is hoped that this positive trend can continue even though global challenges remain. Success in expanding the market and improving product quality will be the key to achieving higher export targets in the future.