The high-profile Belt and Road summit in Beijing in May saw Indonesian President Joko Widodo trying to persuade his Chinese counterpart, Xi Jinping, to invest in the archipelago.
While billions is promised to Malaysia and the Philippines, Widodo hoped for Chinese investment to help him deliver economic growth and infrastructural promises before he faces re-election in 2019. Chinese firms, however, reportedly fear doing business in Indonesia, with problems including acquiring land, handling bureaucratic hurdles and addressing rising anti-Chinese unrest.
At a Chinese investment forum in Manado on Sulawesi, Zhao Baige, a senior Chinese diplomat, called on Widodo to offer Chinese firms tax incentives or help with public relations.
She told the recent forum: “We need to understand the policy and law relating to labour, tax and especially land. Chinese companies really want details. If there’s no land, there’s no business.”
Indonesia is part of China’s vision for creating a “maritime Silk Road”.
Last month, Widodo told Xi that North Sulawesi was one of three provinces where Chinese investment should concentrate, said Tom Lembong, head of Indonesia’s investment co-ordinating board.
Beijing is reportedly providing strong financial and political backing for the move but China’s investors fear they will struggle to deliver.
“There are many permit and land-acquisition problems,” said Zou Hongxia of the state-owned China Road and Bridge Corporation, which is planning to build an industrial zone at Bitung port near Manado.
Chinese moves to build a US$5.5-billion high-speed rail link between Jakarta and Bandung are on hold because of delays acquiring the required land. Chinese train developers have far fewer problems seizing people’s land on the more repressive Chinese mainland.
Coordinating Maritime Affairs Minister Luhut Pandjaitan this week said Indonesia had offered a railway project in Bali to Chinese investors.
“We offered some projects, including railway development in Bali,” Luhut reportedly said.
Luhut said the railway would connect Denpasar to Ubud and Singaraja and aim to attract tourists. “So far tourists are concentrated in Nusa Dua in Badung regency and Denpasar. [With the railway] they will later spread to the northern part of the island.”
Chinese tourists have increasingly been taking the four-hour flight to Manado, since the launch of direct charter services last year, to visit the coral reefs of the nearby resort island of Bunaken (pictured).
“It’s been great for business and now around 40 per cent of my guests are Chinese,” said Martinus Wawanda, who runs two scuba-diving resorts in North Sulawesi.
Bunaken coral reefs are attracting increasing numbers of Chinese tourists. Picture credit: Wikimedia