How Is Indonesia Doing Business in China?

      As the continuous of my previous article “Doing Business in China”, now I’ll try to see what’d happened to Indonesian Businessmen.

      In 2006 – 2008 many Indonesian started doing business in China, they made the southern region as the gate to reach the market for their products because of its bright prospects.

But not least of them face the problems such as get cheated by their business partner in China, or the export goods stuck at the port because of incorrect procedure, until the lack of information of the market condition.

Although the problems repeatedly occurred, “factors that attract investors to China are a very large market share, a conducive investment climate, as well as the availability of abundant human resources,” said Chairman of the Indonesia Business Association of Shanghai Adi Harsono.

  

But the undeniable fact, It is difficult for Indonesia to compete with China. Indonesian businessmen who can be success in China usually entrepreneurs that have been established with strong management to maintain the Guanxi, relationship / connections. Like Garudafood which made an investment by acquiring one of the companies in Xiamen, China.  The Marketing office was opened to reach the Chinese market and as a base to export to another country.

    Another problem that occurs is, under the FTA agreement, all Indonesian commodities are no longer subjected to import duties when enter Chinese market, except sensitive products such as ceramics and steel. In fact, Indonesian swallow nest is still subjected to duty by the Chinese government by 17%. Until now, the nest export  volume to China reaches 500 to 600 tons per year with the selling price is Rp 19 million per kilogram. With that assumption, the total transaction per year is about Rp 9.5 trillion. If the merchant is subjected to duty by 17%, then certainly the potential loss of Indonesia reaches Rp 1.6 trillion a year. Then the Chinese government is always complicating the realization of export from Indonesia with all the series of licensing and the administrative process. In the end, Indonesian exporters have to send goods through Hong Kong and then re-exported to China. Surprisingly, the same difficulty isn’t applied to other ASEAN countries which are also the producer of swallow nests. The Chinese government is going to impose 0% of import duties from Malaysia, Singapore, Vietnam, and Thailand.

       Aware of any cases like that and more Indonesian businessmen is doing business in China, Consul General of Indonesia in Guangzhou, Harimawan Sujitno, was initiated the establishment of SCIBA by inviting entrepreneurs in the south region in July 2010.

         SCIBA officially operated in September 2010, under the supervision of Consul General in Guangzhou. The association provides business consulting and trade, exhibition, information sharing to solve problems faced by Indonesian businessmen in China.

        Because the increasing amount of Indonesian businessmen who are doing business in south region, The Chinese government urged Indonesia to open a consulate general in Guangxi Province. Beside the offering of free land for the consulate building, they were also providing house that can be use for consulate tasks.

www.sciba-cn.org

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