Indonesia and China Cooperate on Financial Recovery in 2022

Indonesia and China Cooperate on Financial Recovery in 2022

  • InCorp Editorial Team
  • 12 September 2022
  • 4 minute reading time

The Indonesian Minister of Finance, Sri Mulyani, recently conversed with the Chinese Minister of Finance, Liu Kun. The bilateral meeting was held virtually, discussing the impact of the COVID-19 pandemic—especially the financial recovery strategy.

They discussed how the pandemic is a major challenge for financial recovery and continues to be a threat. G20 members started to anticipate another pandemic possibility in the future by establishing a Financial Intermediary Fund.

The contribution to Financial Intermediary Fund sets at USD 50 million. Liu Kun strongly supports the establishment, which acts as a funding platform for economic recovery after the pandemic. He further explains that China is also looking to contribute to the initiative.

He expresses his appreciation for Indonesia for taking the initiative and paying extra attention to the issue of food security. In addition, China will actively support and assist Indonesia in the overall effort to promote global economic recovery.

They plan to improve global governance to enable developing countries to play a more significant role in the future. The different sectors that China aims to focus on include the digital economy, green economy, global health, and welfare.

China identifies itself as a developing nation. Due to the mutual standing between Indonesia, they also share the interest of strengthening the market in developing nations, specifically to increase trade relations between the countries.

China and Indonesia have close ties, which is seen through the donation of medical equipment provided to Indonesia by China during the initial stage of the COVID-19 pandemic. Therefore, bilateral cooperation continues to become more strategic and comprehensive.

In addition to the relationship between the two countries, 290 million doses of China-made vaccines have also been distributed and given to the Indonesian people.

Indonesia’s On Track with Financial Recovery

The National Statistics Agency reveals that the Indonesian economy is steadily recovering financially due to the increasing trade mobility amidst the ongoing tension between Russia and Ukraine.

Such positive trends can arise in the economic performance of Indonesia. Indonesia’s economy is expected to gain momentum and welcome between 4.5% and 5.3% growth in 2022. The growing domestic demand and export performance sustains the financial recovery strategy.

Economic growth is directly proportional to the vaccination rollout, the reopening of economic sectors, and the Indonesian government’s fiscal policies to increase the recovery rate.

Revitalize Through the Digital Economy

The Indonesian Ambassador to the Republic of Korea has shared how Indonesia has prepared new sectors such as digital services, health services, electronic assembly, and other novel industries.

These new business sectors show potential for developing an excellent investment destination. Investing in these new sectors in Indonesia would encourage sustainable development.

Indonesia also hopes to deepen its cooperation with China in trade, investment, green growth, and digital economy. The two countries must demonstrate solidarity with other developing countries in various projects.

Specifically, their cooperation is expected to complete and open the Jakarta-Bandung High-Speed Railway, which is part of the cooperation conducted under the “Belt and Road Initiative” that the two heads of state have agreed upon.

The Strategy of the Digital Economy

Indonesia has already set up a Digital Roadmap for 2021-2024 as a strategic guide to achieving digital transformation. The initiative aims to provide equal access to high-quality telecommunication services.

The strategy employed by the government is to create dependable and consistent connectivity to close the digital divide and also increase the ratio of internet connectivity across regions.

Indonesia’s digital transformation puts high importance on ten sectors to speed up the realization of digital infrastructure, government, economy, and society. The sectors are as mentioned below:

  • Digital transportation and tourism;
  • Digital trade, digital financial services;
  • Digital media and entertainment;
  • Digital agriculture and fisheries;
  • Digital real estate and urban;
  • Digital education;
  • Digital health;
  • Industrial digitization; and
  • Government digitization.

There are 100 essential projects spread between the ten sectors to be implemented through coordination and collaboration between the ministries, the central and regional government, corporate actors, and the general public.

The COVID-19 pandemic is one of the dominant catalysts for digital transformation. This momentum will be utilized for economic change, specifically in the digital sector.

InCorp Indonesia (formerly Cekindo) provides business licenses and company registration services for companies seeking to profit from the trend and support digital transformation in Indonesia.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

Lead Form

Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.

We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

Frequent Asked Questions

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.