Posted by: mel | August 26, 2009

Indonesia, Henan Sign Agreements For $200m Investments

Jakarta Globe | Dian Ariffahmi | 24 August 2009

Indonesia and China’s Henan province signed a memorandum of understanding on industry, trade and investment cooperation on Monday at an event marking the start of a business promotion forum that runs through Friday . 

As part of the MoU framework, businesses from the two sides also inked six investment deals worth up to $200 million in the mining, oil, agribusiness and manufacturing sectors. 

The signing ceremony was notable for an apparent change of heart by Industry Minister Fahmi Idris, who warmly welcomed the MoU and the Chinese delegates despite having firmly objected to the Asean-China Free Trade Agreement signed earlier this month. 

The MoU was signed by Fahmi, Henan Governor Guo Gengmao and Chinese Ambassador Zhang Qiyue. 

“Indonesia’s and Henan province’s commodities … and agribusiness sectors are relatively similar,” Guo said. “So we are optimistic that this MoU will boost the trade, industry and investment sectors in both Henan and Indonesia.” 

With some 100 million people, Henan is one of China’s most populous provinces, and recorded the country’s fifth-highest provincial GDP at $265 billion last year. 

In 2008, Indonesian firms invested $9.94 million in 15 projects in Henan. 

Two-way trade was worth $216 million, an increase of 47.7 percent from 2007. 

Indonesia’s principal exports to Henan were rubber and ironsand — a type of sand containing heavy concentrations of iron. 

Meanwhile, trade and financial investment between Indonesia and China fell 20 percent to $11.7 billion in the first half of the year, compared with the same period last year. 

By contrast, China’s nonfinancial investment in Indonesia rose to $100 million, while Indonesia’s nonfinancial investment in China rose 12.1 percent, to $65 million. 

Despite hitting the headlines last week by adamantly opposing implementation of the Asean-China Free Trade Agreement next year, Fahmi acknowledged in his address on Monday that the agreement would support the promotion of industrial and trade relations between Indonesia and China. 

“We will be able to overcome our weaknesses, while China will be able to share its knowledge and experiences with us,” Fahmi said. However, he continued to insist that Indonesia was not ready to compete under terms of the agreement.

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