Indonesia competes with countries for factory relocation from China

Indonesia competes with countries for factory relocation from China

Chairman of the Indonesia Investment Coordinating Board (BKPM) Thomas Trikasih Lembong (left) during investment realization in Jakarta, Tuesday.

Jakarta (ANTARA) - Indonesia competed fiercely with several countries in working towards factory relocation from China owing to trade tensions with the United States, Indonesia Investment Coordinating Board (BKPM) Chairman Thomas Trikasih Lembong stated.

In his presentation on investment realization in Jakarta, Tuesday, Lembong explained that the Indonesian government, through the BKPM and the Ministry of Industry, continued to aggressively encourage China to relocate their industries to the country.

One of Apple's main suppliers, Pegatron, has successfully relocated its factory to Batam by investing US$40 million and will generate export potential of up to $1 billion annually.

"The Ministry of Industry is also communicating with an Apple supplier, Compal, to relocate to Indonesia. Foxconn and Wistron are the two main suppliers of Apple, who choose to go to India. Indeed, we face fierce competition to be able to work on factory relocation from China," he explained.

President Joko Widodo has, since the third quarter of 2018, given directives to work towards seizing the opportunity of factory relocation from China.

Hence, the BKPM and Ministry of Industry delegates have paid regular visits to Chinese furniture centers in Dongguan to relocate their factories to Indonesia.

On the other hand, despite the effects of the trade war, Lembong highlighted the current need to relocate industries outside China amid China’s economic structure no longer being conducive to labor-intensive industries.

"It is time for China to relocate factories that were taken from Southeast Asian countries 20 years ago. The number of workers in China has begun to decrease. China's economic structure is no longer conducive to labor-intensive industries. Now, they are in the high-value service sector and capital sector," Lembong remarked. Related news: Indonesian investment board ready to facilitate relocation of Chinese firms

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