Jakarta. Indonesia’s heavy reliance on exports to China makes the country’s trade balance vulnerable to economic fluctuations in the Asian giant, an economist said on Tuesday.
Mohamad Faisal of the Center for Economic Reform (CORE) said China accounted for 22.5 percent of Indonesia’s total exports in the first half of this year, while exports from other countries to China accounted for 10-12 percent.
“Weakening demand from China will have a major impact on Indonesia’s export performance, which is the main reason for the recent slowdown in exports,” Faisal said in Jakarta.
Indonesia’s international trade surplus in the first half of this year fell by $4.46 billion to $15.45 billion compared with the same period in 2023, government data showed.
Indonesia’s exports to most other countries continued to grow, notably to India, which increased by 22 percent, while exports to China fell by 4.2 percent.
Faisal said this was due to an oversupply of manufactured goods in China which reduced demand for imported raw materials.
“The main difference between Indonesia’s export profile and countries like Thailand, Malaysia and the Philippines is that these countries are not heavily dependent on China,” Faisal said.
In contrast, Indonesia’s imports from China have been growing in recent months, with textile products accounting for 41 percent of Indonesia’s imports from China.
In June, Indonesia’s largest bilateral trade deficit was with China, amounting to $693.4 million, followed by Australia ($331 million) and Thailand ($327.8 million).
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