JakartaGlobe-July 23
Indonesia’s heavy reliance on exports to China makes its trade balance vulnerable to economic fluctuations in the Asian giant, an economist said on Tuesday. China accounted for 22.5 percent of Indonesia’s total export value in the first half of the year, compared to 10-12 percent for other countries’ exports to China, said Mohammad Faisal from the Center of Reform on Economics (Core). “When demand from China weakens, it significantly impacts Indonesia’s export performance. This is the primary reason behind the recent slowdown in our exports,” Faisal said in Jakarta. Indonesia’s international trade surplus narrowed by $4.46 billion to $15.45 billion in the first half of the year compared to the same period in 2023, according to government data. While Indonesia’s exports to most other countries continued to grow, with a notable 22 percent rise to India, exports to China contracted by 4.2 percent. Faisal attributed this to an oversupply of manufactured goods in China, which has reduced its demand for raw material imports. “The main difference in export characteristics between Indonesia and countries like Thailand, Malaysia, and the Philippines is that those countries don’t heavily depend on China,” Faisal said. Conversely, Indonesia’s imports from China have continued to grow in recent months. Textile products accounted for 41 percent of Indonesia’s imports from China. In June, Indonesia’s largest bilateral trade deficit was with China, amounting to $693.4 million, followed by Australia ($331 million) and Thailand ($327.8 million). Read more at: https://jakartaglobe.id/business/heavy-reliance-on-exports-to-china-could-hurt-indonesias-trade-analyst
