The Chinese rattan industry is interested to relocate its businesses to Indonesia since the operational cost in China continues to rise while raw material is available in Indonesia.
"With the changing economic structure in China, many manufacturing businesses are relocating overseas. The increasing operational cost and a shortage of raw material in Guangdong are factors prompting the Chinese furniture industry to relocate factories," BKPM Chief Franky Sibarani said in a written statement here on Friday.
He also noted, "Now we are competing with Vietnam, India and Myanmar in attracting these Chinese industries planning relocation."
He said that furniture industry, which is interested in relocating its business to Indonesia, is classified as a labor-intensive business, thus falling in the priority sector for the BKPM.
"If they relocate their factories to Indonesia, they will have a large worker absorption capacity. If there are 200 firms which recruit 500 workers each, then they will end up absorbing some 100 thousand workers," he explained.
Franky said his side would continue to conduct intensive coordination with the Industry Ministry to guide and attract Chinese investors.
The BKPM is planning to organize investment marketing activities at the end of April, and will invite some 200 furniture manufacturers from Dongguan city, Guangdong Province, China.
Dongguan is located in the southern part of China and is an industrial production center for furniture. It has a furniture exhibition site stretching as long as five kilometers.
BKPM marketing officer for China Yudha Tri Utami said a number of regions are expected to take part in these investment marketing activities, such as Cirebon, Sukabumi and Jepara.
"These regions are known as furniture production centers in Indonesia," she said.
The total amount of foreign investment, excluding that in the upstream oil and gas and financial sectors, made by Chinese investors in Indonesia during 2010 to 2015 reached US$2.1 billion.
Data obtained from the BKPM revealed that China ranked 11th in realizing its foreign investments in Indonesia.
In 2016, the governments of Indonesia and China have committed to securing principle investment worth US$30 billion.