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Indonesia to cement economic ties with China
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The Indonesian Chamber of Commerce and Industry (Kadin) Head Mohamad S. Hidayat has called for a stronger economic relationship between Indonesia and China amid the global financial crisis.

In an exclusive interview with Xinhua on Monday, Hidayat said that China maintains a high-speed growth while the crisis is spreading from the United States and Europe to the whole world. Therefore, Indonesia needs to enhance economic cooperation with China.

"We need more opportunities. China could make some new schemes or agreements with Indonesia in terms of financing matters for our economic cooperation," he said.

"We know that your national reserves amount to about 2,000 billion US dollars now, while that in my country has only reached 60 billion US dollars," he added.

He also said the two countries can make cooperation in consumer products manufacturing and maybe share the markets in Middle East and Eastern Europe. But he reiterated that Indonesia would not import consumer goods that the country can produce by itself any more.

"If Indonesia import raw materials from China, the proceedings should be done here in Indonesia," he said.

Hidayat, who will go with Indonesian President Susilo Bambang Yudhoyono to Beijing for the 7th Asia-Europe Meeting, said that at the meeting, the president will discuss the solutions for the global financial crisis and the economic woes with 44 other leaders and officials from Asia and Europe.

"Indonesia will follow China, Japan and India," he said, when being asked that how to cooperate with other countries in combating the crisis.

In regard to the prospect of the financial crisis, Hidayat said it is different from the previous one in 1997, in which many Indonesian private banks collapsed, and mismanagement of the Indonesian currency occurred. He attributed the losses in 1997's crisis to that Indonesian government at that time had no conceptual solution for the problem. "So we took ten years for a recovery," Hidayat said.

"Now, our fundamental and macro economy are much stronger than the situation in 1997. We have stable foreign exchange. And the most significant one isthat ?the government manage all different things properly and earlier," he said.

Hidayat predicted that the worst moment of the current crisis will come in the first or second quarter of 2009.

In order to alleviate the impacts, Indonesia plans to develop its domestic industries. "We are going to develop our domestic real sector and trading, and we are going to limit our import," Hidayat said, adding that the country can not depend on the United States market and the European market any more due to their economic slowdown.

"The government needs to diversify the export destinations now and look for new markets," he said. "We are considering expanding our market in China for certain commodities, while others may go to Latin American, Middle East and other Asian countries."

(Xinhua News Agency October 22, 2008)

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