Indonesia Needs to Anticipate the Slowdown of the Chinese Economy

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Jumat, 29 Desember 2023 – 17:30 WIB

Jakarta, 29 Desember 2023 – The economic slowdown in the People’s Republic of China (PRC) is a serious concern for countries in Southeast Asia, especially Indonesia.

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In a year-end discussion held by the Indonesian Sinology Forum (FSI) in Jakarta on Thursday, experts and academics expressed their concern about the impact of the slowdown.

One of the speakers in the discussion, Muhamad Iksan, a lecturer and researcher at the Paramadina Public Policy Institute in Jakarta, said that the economic condition of China, post-Covid-19 pandemic, is still struggling to fully recover.

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He highlighted the weakening of domestic demand as one indicator, with retail sales growth reaching only 18.4% in the January-February 2023 period, below analyst estimates.

“The slowdown in China’s economic growth needs to be anticipated by Indonesia, given the significant economic ties between the two countries,” he said.

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FSI Chairman Johanes Herlijanto added that the economic conditions in China in 2023 are a continuation of previous problems, including the property crisis and rising unemployment.

“Along with these problems, there is a tendency for some young Chinese people to become ‘couch potatoes,’ rejecting a work culture that forces long working hours,” he said.

Herlijanto also emphasized the importance of reflection and anticipation at the regional level. “As a precautionary measure, it is important for Indonesia to ensure the availability of alternative trading partners and sources of investment,” he said.

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In addition to economic issues, the discussion also covered tensions in the Asia East and Southeast regions, especially related to the Taiwan Strait. Johanes Herlijanto noted that concerns have been growing since 2022, especially after the statement by PRC President Xi Jinping, who did not rule out the use of force for Taiwan reunification. “These tensions have the potential to spread to Southeast Asia,” Herlijanto said.

Indonesia and ASEAN countries are also reminded of the tensions in the South China Sea (SCS) with China. Chinese coast guard ships have caused tensions in the Exclusive Economic Zones (EEZs) of several ASEAN countries, including Indonesia.

“ASEAN’s joint efforts to prevent China’s aggressive actions and strengthen law enforcement capacity should be prioritized,” Johanes Herlijanto concluded.

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“Along with these problems, there is a tendency for some young Chinese people to become ‘couch potatoes,’ rejecting a work culture that forces long working hours,” he said.

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