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THE PANGOAL REPORT
Apr 17, 2019
Current Status and Prospect of Sino-Indonesian Cooperation under the Background of the “Belt and Road”
Current Status and Prospect of Sino-Indonesian Cooperation under the Background of the “Belt and Road”

Kun Zhai, Academic Committee Member

of the Pangoal Institution


During his visit to Indonesia in 2013, President Xi Jinping proposed the initiative to co-build “21st Century Maritime Silk Road”. Located at the intersection between Pacific and the Indian Ocean as well as between Asian and Oceania, Indonesia is a critical pivot and strategic fulcrum of “Maritime Silk Road”. Indonesia’s maritime power strategy, which is centered on the vision of “Global Maritime Axis”, is consistent with the “Maritime Silk Road” initiative. For three years, China and Indonesia have been actively communicating their “21st Century Maritime Silk Road” initiative and “Global Maritime Axis” strategy and deepening practical cooperation and friendly exchanges. A lot of major cooperative projects, such as Jakarta-Bandung High-speed Railway Project, have been finalized. Cooperation of mutual benefit in fields such as infrastructure construction, trade, investment, finance, e-business, etc, is making constant progress. According to 2015 Report on Five Connectivity Indexes of Countries along the Belt and Road compiled by the research team of Peking University on Five Connectivity Indexes of countries along the Belt and Road, Indonesia ranks the fifth among all 63 countries along the Belt and Road. This shows that the cooperation between China and Indonesia in fields of the Belt and Road Initiative is on a relatively high level. However, with the broadening and deepening of cooperation between the two countries, a series of problems have begun to surface. If the two parties do not pay enough attention to those problems or take measures to solve them, they will have negative influence on the implementation of the two countries on the Belt and Road Initiative. The present report will summarize the achievements of China and Indonesia in implementing the Belt and Road Initiative, analyze the underlying problems and the real altitudes of Indonesia, and propose some recommendations.


I. Progresses and Achievements

Since we entered into the 21st century, especially since the China proposed the Belt and Road Initiative, Sino-Indonesian relations have embarked on a fast track. The two countries have conducted sustained communications in fields such as trade, economy and political exchanges, and have made outstanding achievements.


1. Political field

High-level visits between the two countries are frequent, political mutual trust is deepening, and cooperation between the two countries is fruitful. Since the establishment of comprehensive strategic partnership between China and Indonesia, political mutual trust has been deepening, and practical cooperation has been fruitful. Sustained development of Sino-Indonesian relations is not only to the interests of the peoples of the two countries, but also has made outstanding contributions to regional stability and world peace. The initiative proposed by President Xi Jinping to co-build “21st Century Maritime Silk Road” during his visit to Indonesia in 2013 is a sign that China highly values Indonesia and that Indonesia plays a critical role in “Maritime Silk Road”. Since Indonesian President Joko Widodo took office in 2014, the exchanges and cooperation between the two countries have become closer. The grand vision of Indonesia to build a “maritime power” highly corresponds to the “21st Century Maritime Silk Road” initiative proposed by Chinese President Xi Jinping. China and Indonesia are making joint efforts to construct the “Maritime Silk Road”. This will have a positive influence on the Southeast Asian region. Indonesia is a founding nation of the Asian Infrastructure Investment Bank (hereinafter referred to as AIIB) initiated by China, and it once proposed that the headquarters of AIIB be located in Jakarta. China and Indonesia have common interests in both regional issues and multilateral issues such as enhancement of world peace and prosperity, improvement of South-South cooperation, etc.


After China proposed the Belt and Road Initiative, there have been frequent high-level visits between China and Indonesia. In October 2014, President Xi Jinping talked to Indonesian President Joko Widodo over telephone. In 2015, there were more high-level visits between the two countries. In February, Meng Jinzhu, Secretary of the Political and Judiciary Commission under the Central Committee of the Communist Party of China, visited Indonesia. From March 25 to 28, at the invitation of Chinese President Xi Jinping, Indonesian President Joko Widodo paid a state visit to China and attended the Boao Forum for Asia Annual Conference. The two countries released a joint statement on strengthening of comprehensive strategic partnership relations. In April, President Xi Jinping attended the Asian-African Leaders Conference and the 60th Anniversary of Bandung Conference. The two countries released Joint Press Communiqué of People's Republic of China and Republic of Indonesia. In July, Yu Zhengsheng, Chairman of the Chinese People's Political Consultative Conference, visited Indonesia. In November, President Xi Jinping met with Joko during G20 Summit.


In 2016, high-level visits between the two countries continued. In March, Indonesian Vice President Kalla came to China and attended Boao Forum for Asia Annual Conference. In May, State Councilor Yang Jiechi went to Indonesia and served as one of the two chairmen of the second conference of Sino-Indonesian high-level economic dialogue. In September, President Xi Jinping met with Indonesian President Joko during G20 Summit in Hangzhou.


The two countries have established three cooperative mechanisms, namely, deputy-prime ministerial bilateral dialogue, high-level economic dialogue and cultural communications. They have also established deputy-ministerial level cooperative mechanisms in fields such as space, agriculture, science and technology, national defense, etc. Besides embassies in Beijing and Jakarta, China has set up several consulate generalss general in Indonesia, and Indonesia has set up several consulates generals in Hongkong, Guangzhou and Shanghai.


2. Economic and trade field

Since the Belt and Road Project is implemented in Indonesia, the breadth and depth of the economic and trade cooperation between the China and Indonesia has continued to improve continue improving, and more and more Chinese enterprises have begun to invest in Indonesia.  go to Indonesia for development opportunities.  With a population of 230 million, Indonesia is the Southeast Asian country with the largest number of consumers and it has great market potential. Currently, there are more than 1000 Chinese enterprises investing in Indonesia, and their investments cover areas such as energy, mining industry, transportation, communication, power, finance and agriculture, etc. With the joint effort of governments and enterprises of the two countries, the potential of Sino-Indonesian trade and economic cooperation will be further released, and the friendly communications between the two countries are becoming closer and closer. During G20 Summit in 2016, Indonesian President Joko visited the famous Chinese IT enterprise Alibaba, and invited Ma Yun, the president of Alibaba, to be the economic advisor of Indonesia. Joko hoped that Ma Yun could help 8 million small and medium-sized enterprises in Indonesia to get E-commercialized by 2020. What’s more, IT giants such as Baidu, Tencent, Alibaba, etc, and mobile phone manufacturers such as Oppo, Vivo and Huawei, have settled down in Indonesia, which has set a good example for Chinese enterprises investing to invest in Indonesia.


At present, the largest cooperation project between China and Indonesia is the Jakarta-Bandung High-speed Railway Project. This project has been highly valued since its inception. On October 16, 2015, With continued efforts of communities of the two countries, BUMN China and BUMN Indonesia formally signed Jakarta-Bandung High-speed Railway Project Cooperation Agreement.  on October 16, 2015. The two parties established a joint venture corporation, namely, PT Kereta Cepat Indonesia China (KCIC). It is responsible for the construction and operation of Jakarta-Bandung High-speed Railway Project. On January 22, 2016, the ground breaking ceremony of Jakarta-Bandung High-speed Railway Project was held. On March 16, 2016, PT Kereta Cepat Indonesia China formally signed a franchise agreement with the Transportation Ministry of Indonesia, which meant that the overall construction of Jakarta-Bandung High-speed Railway Project obtained critical legal assurance. One week later, a five-kilometer-long pilot railway went under construction. In July, 2017, Jakarta-Bandung High-speed Railway Project finally got the license for overall construction. On April 4, 2017, the Engineering Procurement Construction Contract of Jakarta-Bandung High-speed Railway Project was signed in Jakarta, which was a sign that this project went into full implementation phase.


3. Human field

The two countries have established a deputy prime ministerial level human communication mechanism. The exchanges in culture, education, youth communication and tourism developed very fast. In 2016, China became the largest foreign tourist source of Indonesia for the first time. Development of communication and cooperation between China and Indonesia in humane these fields is beneficial to the shaping of a good image for China and will reduce the worries of Indonesia about the Belt and Road Initiative as well as about China, therefore ensuring smooth and healthy development of the relations between the two countries. In short a word, the human communications between the two countries are of great significance.


After the Belt and Road Initiative was implemented, China and Indonesia established a deputy prime ministerial level human communication mechanism, a first of its kind for China. which is the first of its kind that China establishes with a developing country. In May 2015, Deputy Prime Minister Liu Yandong visited Indonesia and chaired the first meeting of this mechanism. In August 2016, Bouan, the minister of Indonesia’s Human Development and Cultural Ministry came to China and attended the ninth Sino-ASEAN Education Week and the opening ceremony of the second Sino-ASEAN Education Minister Roundtable Conference. Bouan also co-chaired the second meeting of Sino-Indonesian Human Communication Mechanism. Under this background, the two countries have made great achievements in fields such as culture, education, tourism, etc.


In the field of culture, China and Indonesia have conducted official and non-official communications and cooperation in film, television, publishing industry, art shows, etc.


In the field of education, China and Indonesia have made prosperous progresser, which are mainly in higher education. The cooperation between universities of the two countries is the main channel, and student communications are the core of the cooperation. The two countries have made great progress in language teaching, visiting students, etc. Currently, 15 Chinese universities and colleges have set up in Indonesia.  the major of Indonesia. There are six Indonesian research centers in China. In 2016, China set up “China-Indonesia University and Think Tank Union”. According to data published by Chinese Education Ministry in 2011, about 10957 Indonesian students came to learn in China, and Indonesia ranked the seventh in terms of number of visiting students to China.


In the field of tourism, China and Indonesia are important tourist sources to each other. China and Indonesia jointly conduct tourism advancement activities in order to enhance tourism convenience, improve capacity building and encourage enlargement of investment in tourism. In 2013, the two countries signed China-Indonesia Memorandum of Understanding in Tourism Cooperation. In 2014, Indonesia invited Jack Chen to be the Tourism Ambassador of Indonesia. In February, 2015, Indonesia’s Ministry of Tourism released “Zheng He Tourist Path” Plan to attract Chinese tourists. Garuda Indonesia initiated regular non-stop flight course between Beijing and Bali Island. The course has three flights every week. Combined with the existing non-stop flight courses between Jakarta to Beijing, Shanghai and Guangzhou, Garuda Indonesia hasd four non-stop flight courses to China. Besides, Garuda Indonesia will also initiate non-stop charts in peaking tourism seasons. It will initiated seven non-stop charts between Bali Island and Harbin, Chongqing, Chengdu, Kunming, Xi’an, Shenyang and Ningbo. With the warming bilateral relations between China and Indonesia, Chinese tourists to Indonesia keep increasing year by year. According to data released by Central Statistic Bureau of Indonesia, in 2016, the number of Chinese tourists to Indonesian was 1.429 million, a 13.96% growth than that of 2015, which was 0.95 million. China has become the largest tourist source for of Indonesia. Indonesia’s Ministry of Tourism expects that in 2017 about two million Chinese tourists would go to Indonesia.


II. Problems

1. Policy coordination: there is room for policy coordination. The two countries lack integration strategies between the Belt and Road Initiative of China and the “Global Maritime Axis” Strategy of Indonesia. Natuna Islands are the main obstacle to maritime cooperation between the two countries. Currently, China and Indonesia have the problem of “more words, less actions” in terms of maritime cooperation. Many agreements and commitment are yet to be implemented. Those common agreement and oral commitments reached upon by leaders are not well implemented by relevant agencies. The efficiency of project advancement is to be improved.


Policy coordinations itself are not sufficient for  in the process of strategic integration. On the one hand, existing mechanisms should be fully  are not fully utilized. On the other hand, maritime agencies regularly participating in policy communications isare not enough.


Overlapping sea waters around the Natuna Islands have a negative influence on the atmosphere of cooperation. Sovereignty disputes arising from South China Sea issues are unavoidable in Sino-Indonesian maritime cooperation. Although Indonesia declares that it is not a sovereignty claimant in South China Sea, the two parties have frequent confrontations due to the fact that sea waters around the Natuna Islands and traditional Chinese waters overlap. Meanwhile, as the largest economy of ASEAN, Indonesia’s stance and attitude toward the South China Sea disputes will exert some influence on the negotiation process. altitude in South China Sea disputes will to some extent influence the negotiation process of this issue.


2. Facility connectivity faces many obstacles. Land expropriation is another  a critical problem in Indonesia. The administrative review and approval process is very complicated, and corruption is very serious. The coordinating ability of the government is limited. Difficulties in land expropriation have become a main hindrance to Chinese overseas investments. The investments of Chinese enterprises in overseas infrastructure projects often lack comprehensive and scientific feasibility surveys, and those enterprises often neglect or underestimate difficulties in land expropriation. Difficulty in land expropriation is the second most serious hindrance to Chinese investments for Indonesian  in Indonesian infrastructure companies. The most serious hindrance is administrative approval.


In a country where the central government and local governments are divided, divide powers, the administrative review and approval process in Indonesia is very complicated. The coordinating abilities of all levels of governments are limited, and procedural corruptions are very common in Indonesia.


Labor force is another critical problem that causes widespread disputes in Indonesia. There are many rumors about China and Joko. Those rumors may lead to social instabilities and seriously affect the implementation of relevant projects of the Belt and Road.


3. Unimpeded trade: Trade is unimpeded but it is not smooth. Trade between China and Indonesia is not smooth, which is a common phenomenon. Many preference policies cannot be implemented in Indonesia. The procedures to apply for business certificates are very complicated and the business environment of Indonesia need improving. Indonesia continues to view simplification of investment certificates as one of the measures to improve its business environment.


In response to the abovementioned problems, Indonesian government formally initiated “One-stop Comprehensive Service Platform” of nationwide investment approval in 2016. This measure was to approve set-up of companies and issue certificates. Investors could obtain service assistance, finance convenience and investment consultancy.


4. Financial integration faces some risks. Chinese enterprises and financial organizations investing in Indonesia face many adverse factors such as high cost, low income and high risks. The economic infrastructures of Indonesia are weak; the abilities to pay for loans are weak, and the probability of breaching is high. What’s more, infrastructure investment projects have the features of long duration, high cost and long repaying cycle. All these factors increase the risks of Chinese financial organizations in investing in Indonesia. Besides, risks of currency rates are also worth our attention.


5. People-to-people bond needs to be enhanced. In Indonesia, the level of understanding by common people to the Belt and Road is quite low, and there many misunderstandings. “China Threat Theory” or neocolonialism is quite popular in Indonesia, which is shown in press reports by Indonesian media to the Belt and Road Initiative.


“China Threat Theory” or neocolonialism is quite popular in Indonesia. According to data from a “Chinese Cultural Impression Survey” conducted in Indonesia, the overall impression of the interviewees toward China and Chinese culture is to be improved. Among those impressions, the impression that “China is continuing to develop” gets the highest scores, the impression that “China is innovative” and “China is rich and powerful” ranks in the middle, and the impression that “China is reliable and credible” gets the lowest scores.


Chinese enterprises are inclined to employ Chinese workers, and some Chinese workers are not well-educated. This has caused many problems. Since the Belt and Road Initiative began its implementation, there have been many disputes over Chinese employees. For example, in order to complete the project as early as possible, Chinese enterprises tend to take thousands of Chinese workers to Indonesia. Consequently, the enterprises will failed to create employment opportunities for local governments. As a result, So , it is no surprise that local people will havehave had a very negative attitudes toward those Chinese enterprises and Chinese workers.


The academic community in Indonesia is the main opponent toward the idea of the Belt and Road.  a main source of opposing voices toward the Belt and Road. Quite a proportion of Most Indonesian experts have misinterpretation and bias toward the orientation and meaning of this initiative.


III. Countermeasures and recommendations


1. On the national level

(1) The two countries should strengthen top-level design and communications, and solve the disputes arising from overlapping waters around the Natuna Islands through peaceful negotiations.


China and Indonesia should continue to enhance high-level visits and communications to form a desirable situation of friendly interactions. China should invite Indonesian leaders to participate in various kinds of activities sponsored by China. In this way, the two countries can consolidate their political common understandings and strengthen top-level designs. The two countries should create conditions for the successful holding of the second meeting of the high-level mechanism of Sino-Indonesian human communication, the fifth meeting of China-Indonesia deputy prime ministerial level dialogue mechanism, and the second meeting of Sino-Indonesian high-level economic dialogue. The two countries should make good arrangements in the three fields of political mutual trust, trade and investment, and human communications to expand room of cooperation. The two parties should facilitate negotiations about “Action Plan on Implementation of Sino-Indonesian Comprehensive Strategic Partnership” and the signing of this plan with the aim to provide a detailed roadmap for cooperation of the two countries in relevant areas. The two countries should steadily advance the implementation of bilateral and multilateral agreements signed previously to strengthen maritime cooperation and Sino-ASEAN maritime cooperation. They should take all measures to ensure that the Belt and Road Initiative and the total plan of ASEAN Community match and complement each other.


The parties, economic departments, maritime departments, officials of local governments, and think tanks of the two countries should communicate sincerely and equally. On the one hand, China shall should make a comprehensive introduction to the background, orientation, purpose and action plans of the Belt and Road Initiative, and Indonesia shallshould express its concerns about and expectations of the initiative. In this way, the two countries can communicate effectively, eliminate worries and build a friendly atmosphere of political mutual trust. On the other hand, China and Indonesia should design and refine concrete intention of cooperation and practical measures. They should, based on consideration of each other’s  the demand,  of each other, formulate detailed and feasible implementation plans, roadmaps and schedules, in order to make the common understanding of the leaders of the two countries come true.


The exclusive economic zone around the Natuna Islands overlaps with the traditional sea areas of China. In handling this dispute, the two parties should be more practical. Currently, the Belt and Road Initiative of China matches Indonesia’s foreign policy which is oriented around economic development. This is beneficial to avoid the expansion of this dispute and to solve the overlapping waters around the Natuna Islands. To sum up, China and Indonesia, with their bilateral relationship in an unprecedented "honeymoon period", both tend to negotiate and solve problems in a peaceful and gentle way. The possibility of resorting to military force is remote and the two sides are very likely to argue about the issue of Natuna Islands without undermining the bilateral relationship. However, external forces such as the United States, Japan and Australia get involved in this issue and advocate "China threat theory", which will affect the process of problem solving to some extent, and further influence regional peace and stability.


(2) China should pay more attention to propaganda work, clarify basic concepts and eliminate worries and suspicions. China must eliminate worries and biases from all classes of the Indonesian society, especially from the governments and think tanks. These worries and biases toward the Belt and Road Initiative are hindering  of serious effect on the implementation of this great initiative. Only through elimination of these worries and suspicious can China and Indonesia focus on cooperation of this initiative and realize prosperous co-building and development of the two nations.


One of the most important approaches to eliminate worries of Indonesia is to build a positive image of China. That is, the culture, education and propaganda agencies of China should pay attention in promoting to set-up ofa true and positive image of China among the Indonesian people, especially those original inhabitants. Another important approach is the media. First, Chinese media should change the previous discourse system. What’s more, China’s official media should maintain friendly communications with local media of Indonesia. The Belt and Road Initiative needs as much support and recognition as possible from the Indonesian people. Such support and recognition from the local people is of great importance to the implementation of the Belt and Road Initiative. On the other hand, China’s media should also do such work well in China.


China should enhance the institutional contacts with Indonesian think tanks and universities, and lead scholars of both sides to strengthen research on shared issues through establishing joint research and exchange programs and "Belt and Road Initiative" Research Funds, thus providing intellectual support for our countrys decision-making.


(3) China should initiate a campaign of public diplomacy to enhance human communications and exchanges, and to facilitate understanding and trust of the Indonesian society.


In the current global environment, public diplomacy is playing a more and more important role in the stage of diplomacy. In IR public diplomacy or people's diplomacy, broadly speaking, is the communication with and dissemination of propoganda to foreign public to establish a dialogue designed to inform and influence. It is practiced through a variety of instruments and methods ranging from personal contact and media interviews to the Internet and educational exchanges. Through mutual communication, public diplomacy can help people realize in the imparting and recognition of policies, ideas, culture and sense of value. It can also enhance understanding and recognition of each other. Public diplomacy can make it possible for China to reach agreement and build common sense with neighboring countries. It is an important bridge. The Chinese government should review and develop its public diplomacy policy toward Indonesia, and continue to drive comprehensive human exchanges with an open and tolerant mind. While deeply conducting friendly communications in fields such as culture, tourism, science and technology, and local cooperation, China should seize opportunities to fully explore the functions of all communication channels, thus improving the mutual understanding and friendship between China and Indonesia.


(4) Indonesia should recognize the need to solve those underlying issues within the country, such as the coordination between the central government and the local governments, the continuity of polices and laws, corruption, legislation of labor force, laws on land expropriation, etc.


The abovementioned problems are very common in Indonesia. Take corruption for example. Indonesia is a country of serious corruption. According to 2016 results of Corruption Perception Index of Transparency International, Indonesia ranks 90th place out of 176 countries. Corruption is an important developmental challenge that poses economic and social costs in Indonesia. Interference in public laws and policies for the sake of personal or private gain has weakened the competitiveness of Indonesia. About one-quarter of ministries suffer from budgetary diversions in Indonesia. Households spent approximately 1% while enterprises spent at least 5% of monthly company revenue on unofficial payments. Social costs due to corruption in Indonesia include the weakening of government institutions and the rule of law.


Regarding the political, legal and institutional problems within Indonesia, the present paper make the following suggestions. Indonesia shouldshall improve the coordinating abilities of the central government with local governments. Departments within the governments should strengthen communications and support. Investment approval procedures should be simplified with the aim to strike corruption and build a good investment environment. We should realize that corruption can be eliminated in a night, and the campaign to strike corruption will endure for a long time. While striking corruption, the government should s shall formulate more active measures to encourage officials to explore their potentials to improve the efficiency of the governments. Besides, land expropriation has become a significant obstacle for Indonesia to attract foreign investments. So, the Indonesian government should make necessary reform to the existing laws and regulations on land, clarify the ownership of land, and develop effective land expropriation procedures. This will facilitate the infrastructure construction in Indonesia and greatly speed up the economic growth of Indonesia. On the one hand, local labor agencies shall enhance the review and approve al of visas of Chinese workers and strike those without visas. On the other hand, local universities and colleges should cooperate with enterprises, and train sufficient Indonesian workers to improve current labor force problems.


2. On the level of enterprises

(1) Chinese enterprises should form correct understanding of the investment environment in Indonesia.

To avoid risks and improve the rate of return on investment, China should establish mechanisms of assessment, insure, exit, localization and diversification, formulate investment strategies according to the actual situation of the Indonesian market, and avoid rash action and subjective speculation before investing in Indonesia. Chinese enterprises should make the best use of existing resources, as they have a certain size of investment and many kinds of associations Chamber of Commerce in Indonesia. To get a higher return, the companies should make a long-term planning in the beginning, rather than rush to act.


In addition, its better to establish the concept of local management for the Chinese companies operated in Indonesia. The problem is that the business process of many Chinese enterprises in Indonesia is still dominated in China. Some products are sold in Indonesia, but local customers have to seek service from Chinese manufacturers if there are some quality problems. For the success of investment in Indonesia, Chinese enterprises should make full use of local resources and localize the corporate culture, human resources, products and brands, so as to promote the healthy development of companies.


(2) Chinese enterprises should possess considerable capital capacity and risk bearing capacity, which are indispensible prerequisite to investment projects in Indonesia.


In the long run, corruption will surely be diminished. But in the short term, corruption is still very serious in Indonesia. In dealing with local governments of Indonesia, Chinese enterprises often have to pay tips and so on, which will increase the operational costs of the enterprises and reduce the efficiency.


To avoid the risk of deposit loss, Chinese companies should try to deposit funds in the Bank of China's Indonesian branch / Industrial and commercial bank of China's Indonesian branch when they launch projects in Indonesia. Funds deposited in local Banks should be kept in small amounts for daily use.


For the association of south-east Asian nations' returning card check problem such as the CIQ, while enterprises are actively making use of CIQ and enjoying the preferential tariff, they should focus on the following points: First, for the goods exported to Indonesia, the customs clearance invoice should be consistent with the exporter of certificate; second, for the goods exported to Indonesia, commercial documents should be consistent with the description of the goods; third, for the goods transited via Hong Kong and Macau, whether the bill of lading is revealed, they should be applied for "no reprocessing certificate" in local authorities as soon as possible; fourth, for the problem that the certificate is queried during the customs clearance of goods. It is recommended that companies should actively contact the business department which is in charge of the inspection and quarantine of origin and seek them for help to solve the problem.


(3) Chinese enterprises should employ worker legally and optimize human resource structures.

Chinese enterprises investing in Indonesia should create employment opportunities for local people. Those Chinese enterprises who want to invest in Indonesia for a long period should pay attention to human resource training and reserve talents for the development of the enterprises. At the same time, enterprises should make good preparations for Chinese employees participating in overseas projects. Chinese enterprises are actual performer of Going-out Strategy, Chinese employees are the outward manifestations of China's international image and the messenger of Chinese civilization and ritual. When Chinese employees are participating in overseas project, they should try to get hold of basic skills of communication, and respect Indonesian people's religious beliefs and social customs.


Besides, Chinese enterprises should cooperate with local governments labor department, sign formal and effective labor contract with employed local workers, clarify rights and obligations of both sides, and do the professional skills training for local staff. If any sides break the contract, they should act according to the labor contract to protect legitimate rights and interests of Chinese enterprises and local staff reasonably and legally.


IV. Prospect of cooperation

Within the framework of the Belt and Road Initiative, China and Indonesia have broad room for cooperation and bright future for development, especially in the area of infrastructure construction in Indonesia. The domestic economy of Indonesia is still in the stage of fast growth, and the area of infrastructure construction is one with huge demand. Indonesia is the largest potential market for China to conduct construction contracting service in Southeast Asia. According to “2015-2019 Medium Term Construction Development Plan” of Indonesia, in the coming five years, Indonesia will construct 250 kilometers of highway, 1000 kilometers of expressway, 3258 kilometers of railway, 24 large ports, 60 ferries, 15 modern airports, 14 industrial gardens, 49 reservoirs, 33 hydraulic power stations, and build irrigation systems for one million hectares of farm land. It is expected that if the projects are completed, the infrastructure of Indonesia will be greatly improved. It is good news that China and Indonesia have made quite a few achievements in connectivity and infrastructure construction cooperation. In the coming five years, Indonesia will put the construction of highway, railway, bridges, ports, and ferries on its priority  the prioritization list, and the estimated investment will be up to 600 billion US dollars. China and Indonesia should put these projects in the list of important cooperation. China is able and willing to support the infrastructure of Indonesia. China can participate in the project contracting and investment of ports, power stations, highway, railway, airports, bridges, etc, and provide planning and designing support.


With the sustained development of bilateral relations and economic ties between China and Indonesia, the two parties face desirable opportunities in cooperation in the area of infrastructure construction. When investing in overseas projects, Chinese enterprises should adjust their operation concepts to benefit local people. We believe that in the forthcoming five to ten years, with the participation of Chinese enterprises, the infrastructure construction in Indonesia will vastly improve.

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