"Competition is unavoidable. So, openness and competition is part of our commitment," he said at a meeting in Shanghai.
The President, who is in China for the G20 summit, called on the people to prepare well to deal with the competition.
He told those who are pursuing further study or working abroad to equip themselves with skills and expertise if they wish to return and work in the country.
"Those who are working at Alibaba here, for example, may later set up Alibaba Indonesia," he exhorted.
He also called on those who are in China to learn how the Asian country developed so fast.
"We need to understand how were they are able to build railroads stretching 2,000 kilometers within a year," he stressed.
He noted that when he had first visited China, they still had 18,000 kilometers of railroads but right now, they already have 21,000 kilometers.
"(We must think) how we can catch up," he added.
He noted that citizens who stayed abroad and gained special expertise could return to help build the country.
Those who stay in China may also act as marketers for Indonesian tourism, he stated.
"Indonesian citizens in China can promote those places in Indonesia which are worth visiting," he observed.
He reminded that Indonesia is a country with various natural wonders and is worth visiting by foreign tourists.
He informed that he and Chinese President Xi Jinping have signed a cooperation agreement on tourism.
He explained that the two countries had agreed to ensure that ten million Chinese tourists visit Indonesia and it has shown results.
"Manado (North Sulawesi) last month saw an increase in foreign tourist arrivals, reaching up to 1,000, due to direct flights from four provinces in China. People in Manado are now setting up restaurants and hotels," he disclosed.
At the meeting, President Jokowi was flanked by First Lady Iriana and a number of cabinet ministers.
(Reporting by Joko Widodo/Uu.H-YH/INE/KR-BSR)