Indonesia China Trade Agreement

kenty9x | February 28, 2022 | 0

The monetary agreement between Indonesia and China will also strengthen China`s growing position in Indonesia. The free trade agreement lowered tariffs to zero on 7,881 product categories, or 90% of imported goods. [15] This reduction entered into force in China and the top six ASEAN members, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The other four countries are expected to follow suit in 2015. [16] In addition to the progress mentioned above, Indonesia and China plan to triple bilateral trade from about $31 billion to $100 billion over the next three years. In addition, the two countries are transforming the bilateral economic and trade cooperation agreement signed in 2011 into a framework agreement on trade and investment. Despite the tensions in relations between Jakarta and Beijing, all these developments indicate many fruitful advances in the coming years. The latest deal would reduce China and Indonesia`s dependence on the US dollar as the world`s main currency in their international transactions. The Framework Agreement was signed by eleven Heads of Government in Phnom Penh, Cambodia, on 4 November 2002. [4]: Hassanal Bolkiah (Sultan of Brunei Darussalam), Hun Sen (Prime Minister of Cambodia), Megawati Soekarnoputri (President of Indonesia), Bounnhang Vorachith (Prime Minister of Laos), Mahathir bin Mohamad (Prime Minister of Malaysia), Than Shwe (Prime Minister of Burma), Gloria Macapagal-Arroyo (President of the Philippines), Goh Chok Tong (Prime Minister of Singapore), Thaksin Shinawatra (Prime Minister of Thailand), Phan Văn Khải (Prime Minister of Vietnam), Zhu Rongji (Premier of the State Council of the People`s Republic of China). [4] [5] On 1 January 2010, the average tariff rate on Chinese products sold in ASEAN countries increased from 12.8% to 0.6% until other ASEAN members implemented the free trade area. Meanwhile, the average tariff rate on ASEAN products sold in China rose from 9.8% to 0.1%. [13] In 2015, ASEAN`s total trade in goods with China reached $346.5 billion (15.2% of ASEAN trade), and ACFTA accelerated the growth of China`s direct investment and trade cooperation.

[6] China first proposed the idea of a free trade area in November 2000. The heads of state and government of ASEAN and China therefore decided to consider economic integration measures in the region[1][2] In Brunei the following year, they approved the establishment of an ASEAN-China Free Trade Area. [3] It could also help China achieve one of its main goals: to dominate international trade as the world`s largest producer. The ASEAN China Free Trade Area (ACFTA) is a free trade area between the ten member states of the Association of Southeast Asian Nations (ASEAN) and the People`s Republic of China. The first stage included the 6 original signatories who took care of eliminating their tariffs on 90% of their products by 2010. [6] Between 2003 and 2008, trade with ASEAN increased from $59.6 billion to $192.5 billion. [7] China`s transformation into a major economic power in the 21st century has led to an increase in foreign investment in the bamboo network, a network of overseas Chinese companies operating in Southeast Asian markets that share common family and cultural ties. [8] [9] ASEAN members and the People`s Republic of China together had a nominal gross domestic product of about $6 trillion in 2008. [10] [11] Although China is one of its main trading partners and one of its main investors, Indonesia rarely uses the yuan in its transactions. The president of the Indonesian Employers` Association, Hariyadi Sukamdani, said that only 10 percent of Indonesian-Chinese trade in 2018 used the yuan. Fruitful results have been achieved in economic cooperation and trade between the two countries.

Bilateral trade has grown quite rapidly. And China`s direct investment in Indonesia has grown rapidly. The two countries have signed several important cooperation documents such as the China-Indonesia Five-Year Development Programme for Economic and Trade Cooperation and the Agreement between the Government of the People`s Republic of China and the Government of the Republic of Indonesia on Indonesian Integrated Industrial Parks. The central banks of the two countries renewed the bilateral currency exchange agreement between the Chinese yuan and the Indonesian rupiah for a total value of RMB 100 billion. .