Indonesia Advantages
As the twenty-first Century “maritime Silk Road” by land, Indonesia has its unique geographical advantages. In response to “The Belt and Road Cooperation Initiative, Indonesia has the reality of their own needs. Indonesia has more than 17000 islands, the largest archipelago nation in the world, and the only country in ASEAN that has a population of over $100 million, has abundant natural resources, but has long lagged infrastructure development. Indonesia’s central bank governor Agus said, “the global economic downturn in 2016 will continue, is expected to global economic growth rate of about 3.5%-3.8%, while Indonesia’s economic growth rate of about 5.2%-5.6% in 2016.”.”
As of mid October 2015, a $5 billion 500 million new million flowers Chinese railway, marking the Chinese manufacturing, Chinese equipment market in Indonesia established a new milepost. The economic and trade relationship between such a China and experienced the ups and downs of the neighbors, in the “The Belt and Road” initiative will change?
Indonesia Economic
The local economic construction in Indonesia mainly adopts the mode of PPP (public-private partnership), and the huge external funding gap is the most concern of the Indonesian government. Indonesia’s national savings rate is low, the financing costs are high, Indonesia’s S & P’s sovereign rating of BB+, slightly lower than the investment grade rating, so that it can not large-scale financing in the international market. Under this background, China syndicated to “The Belt and Road” with a good head.
At the APEC conference in 2015, Chinese and Indonesia have already agreed to bilateral currency swap scale increased to $20 billion, a series of financial arrangements China makes the subsequent company obtained the opportunities in the investment and financing projects.
- In April 2015, the import and Export Bank of China reached an agreement with PT Bukit Asam, a large state-owned coal company in Indonesia, to provide about $1 billion 200 million in loans. The fund will be used to build a coal-fired power station in southern Sumatra and is expected to be in use by mid – 2019.
- China National Development Bank in 2016 September to Indonesia million bank, people’s Bank, independent Indonesian National Bank Indonesia 3 state-owned banks were for $1 billion in credit, repayment period of 10 years, of which 30% is RMB loans, while the remaining 70% dollars in loans, the loan will be used for Indonesia trade and investment cooperation projects financing and refinancing. CDB said it would also provide long-term loans of $30 billion to support financing for infrastructure construction and trade settlement in the future.
- ICBC (Indonesia) Co., Ltd. (hereinafter referred to as ICBC Indonesia) and the Indonesian national savings bank (referred to as BTN) signed Indonesia’s “million residential” housing project memorandum of understanding (MOU). According to the memorandum, ICBC Indonesia in the next 3 years to the BTN bank to provide 5 billion yuan or equivalent 10 trillion rupiah loans. The memorandum includes ICBC, Indonesia to BTN bank in infrastructure construction, housing construction loans, the purchase of BTN bank credit assets and cooperation with the BTN bank syndicated loans.
- The Asian Development Bank will provide Indonesia with a loan of $2 billion 200 million to support its infrastructure construction in 2016, the amount of aid is higher than the $1 billion 400 million provided in 2015. The day before, the Asian Development Bank Vice President Bambang said that Indonesia’s infrastructure development in greater demand, so the next ADB will increase the loan amount, loan period of 5 years, the annual interest rate of 1.2%.
Indonesia’s 35 million kW power plant plan
Indonesia is a great market for testing machine cause of its big plan of the construction project.
Indonesia zuoke Wei president under the leadership of the government plans to Daxing infrastructure construction in the period of 2015-2019, including increased 35 million kilowatts of electric power production and supply network, build many ports and airports, the development of the highway network, the development of high-speed train and light rail project etc..
In order to implement the plan that determination, President Djoko signed a presidential decree for the Department of a series of power plant construction plans to provide legal support to clear the government departments and enterprises in equipment procurement, business license, land acquisition process may encounter obstacles. At present, 19% of the projects have entered the substantial construction phase in the construction plan of the power station, and at least 100 of the 212 new power stations have completed the land requisition procedures.
China enterprises have achieved abundant results in this round of new power plant project: Huadian Bali Island project has been completed, China hydropower in North Sumatra Pangkala thermal power station and hydropower station, Gatti Gedi West Java Gezhouba Dam group in southern Sulawesi to the fire station, Taka oceanwide in North Sumatra power station are Medan industrial zone to start the construction, Shenhua in South of Jiangsu 2 * 350MW IPP electric power, steel equipment in Medan daily processing has been bid 1500 tons of waste incineration power generation projects, Dongfang Boiler together will provide the first domestic China Chengda 1000MW Indonesia Chicago coal three Raza (currently the world largest capacity) China electric power generation equipment, the construction of Kota Bengkulu gas coal-fired power station has just signed a “purchase agreement”, marks the beginning of the preparation and financing. These projects represent the Chinese enterprises are from the contractor to the identity of the owners is also built to Chinese transition, China manufacturing and China creation echelon leap.
