CHINA MARITIME ECONOMIC POLICY: POTENTIAL FOR COOPERATION WITH INDONESIA

chinaimg-20160912-wa0001

By: Andri Jufri Said, Edy Wardoyo, Faizal Chery Sidharta, Sulaiman Syarif

China’s Maritime Economy Policy           

For the past three years, three of the largest ports in the world are located in China. According to data from World Shipping Council, Shanghai is the world’s busiest container port in the world, and two other Chinese are in the top five and nine in the top 20. The major ports are located around China’s three key manufacturing hubs: The Pearl River Delta around Guangdong, the Yangtze River Delta around Shanghai, and the Bohai Rim around Beijing/Tianjin.

            Chinese ports depend on a prosperous world economy to flourish. With a global economy facing challenging headwinds, China’s ports have also seen a substantial slowdown in growth, with throughput in national ports up to 7.2 per cent in 2012, representing a 6.1 percentage point decline from the growth rates seen a year before. Total national container throughput fell in year-on-year growth terms by 4.3 per cent.

            To support its maritime capacity, China develops shipbuilding industry as a strategic sector, and it is aimed primarily at enabling China to be self-sufficient in sea trade. In China’s perspective, the supply of raw materials for its economy, meeting the food needs of its people, and transporting its export should be undertaken by Chinese-built ships. In other words, a strong shipbuilding industry is a central pillar in China’s maritime development.

            As a result, a modern and large Chinese merchant marine has emerged in a relatively short time. China’s merchant marine has transformed itself from a modest and elderly fleet predominantly employed in domestic trading into a group of the best-equipped internationally trading shipping companies. China now runs some of the world’s biggest maritime training colleges, including vocational colleges dedicated to training seafarers. Around 5.000 student a year are graduated from these colleges, which is considered adequate to replace around 60.000 seafarers needed by fledging Chinese merchant vessels.

            Another maritime sector to be developed further in China is fishing industry. China’s consumption and capacity to catch fish is massive. In 2010, China consumed about 50 per cent of global fisheries production (fishing and fish farming), and had more than 675.000 registered motorized fishing vessels. Of these, about 1900 are designed for Distant Water Fishing (DWF) and it’s the world’s largest DWF fleet. By comparison, the US operates around 200 DWF vessels.

            A major issue associated with China’s fishing industry is that its humongous appetite for fish and the size of its DWF fishing fleet. Although China has done a reasonable job of regulating its domestic fishing industry, it has not been good on important indicators for international fishing, measures of illegal and unregulated (IUU) fishing.

            The various aspects of China’s maritime capability indicate that China is already a major maritime power in terms of its merchant marine, shipbuilding and fishing industry.

Impact to Indonesia

Chinese President, Xi Jin Ping, while speaking to the Indonesian Parliament in October 2013, had mooted a proposal for the establishment of a “Maritime Silk Road” (MSR) which calls for China to work with ASEAN partners to develop maritime infrastructure, particularly sea-ports to support connectivity.

The proposal of MSR has strategic dimension. The Chinese economic growth demands an enormous and modern port infrastructure in its trading partner countries. In that context, China is keen to contribute to the construction of maritime infrastructure in Southeast Asia, particularly in Indonesia. President Xi Jinping offers to support Indonesia’s plans to develop its maritime infrastructure by encouraging Chinese firms to invest and sponsor projects through the Asian Infrastructure Investment Bank and the Silk Road Fund.

On the other hand, at the CEO Summit of the Asia-Pacific Economic Cooperation forum in Beijing on Nov. 10, 2014, President Joko Widodo invited Chinese companies and others to help build 24 seaports and deep seaports and a maritime highway from the west to the east of Indonesia to ease price disparity of commodities.

In fact, Chinese companies are already actively involved in maritime infrastructure and connectivity development in Indonesia. Chinese companies support the building and expansion of over 30 sea ports in Eastern Indonesia and looking at developing a partnership in the redevelopment and expansion project of the Tanjung Priok Port in Jakarta. They participate in the planning and design of highways, railways and other port supporting facilities, and help reduce the cargo dwelling time there. China also offers to support the building of Batam-Bintan “sea bridge” to contribute Indonesia’s ‘maritime toll road’ strategy.

Indonesia welcomes China’s initiative to enhance bilateral cooperation. One of the efforts is establishing China Desk in BKPM Office in Jakarta. It aims to increase services to Chinese investors. In addition, the government will also open Indonesia Investment Promotion Center (IIPC) in Beijing. In terms of infrastructure cooperation, the government of Indonesia has prepared the list of potential infrastructure projects that are ready to be offered. The projects to build are 2,000 kilometer-road, 1,000 kilometer-toll road, 15 airports and 24 ports up to 2019.

Conclusion

Indonesia could get benefit from China’s stronger and continuously growing economy. Maritime economy sector could be one of the main focuses of Indonesia-China economic cooperation. Through this cooperation, both countries could further strengthen good partnership based on the principle of mutual benefits for both sides. For Indonesia, China’s support could contribute in the realization of the “global maritime fulcrum” particularly in the areas of maritime resources and maritime infrastructure. In time, as the biggest country in Southeast Asia, this close partnership with China will contribute to peace and stability in the region.

oOo

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s