CHINESE INVESTMENT AND CONSEQUENCE OF FOREIGN WORKER PRESENCE IN INDONESIA by Fardah

Jakarta, Jan 20 , 2017(Antara) - Chinese investment in Indonesia has increased significantly over the last several years, making China the third largest investor in the country after Singapore and Japan.

        The total value of Chinese investments reached US$1.6 billion in the third quarter of 2016, with West Java being the biggest recipient at Rp82 trillion. This is followed by East Java with Rp60 trillion, Banten with Rp43 trillion and Jakarta with Rp42 trillion.  
    China's technology sector is one of the main industries that helped boost Chinese investment in Indonesia, according to the director of the Investment Coordinating Board (BKPM), Wisnu Soedibjo, in Jakarta on Jan 19. 
    Singapore and Japan have also widely used Chinese technology in their production lines, he added.

         Due to the increase of Chinese investment, companies have also brought Chinese nationals to the country on a temporary basis, along with their expertise on how to use specialized technology until their knowledge can be transferred to local staff.    
    Soedibjo added that his agency did not have the authority to influence the Chinese investors' decisions regarding the use of their technology and their employee hiring policies.

         Data from the Manpower Ministry and the Immigration Directorate General indicated that 21,121 Chinese workers have applied for permits to work in Indonesia.

         During 2016, the ministry handled 1,324 cases of visa or working permit violations involving Chinese workers.

         The frequent reports on arrests and deportations of Chinese nationals in several regions of the country have recently caught the attention of the Chinese Government.

         The Coordinating Minister for Political, Legal and Security Affairs, Wiranto, stated that the Chinese Ambassador to Indonesia, Xie Feng, assured him that China has complied with Indonesian laws regarding its foreign workers.

        "The Indonesian people should not worry about the alleged influx of millions of Chinese workers. The Chinese government supports Indonesia's efforts to deport Chinese tourists who misuse their visas," Wiranto said on Jan 18.

         The minister also remarked that the Chinese ambassador had denied rumors that millions of Chinese workers are entering the country to work illegally.

          Only skilled workers are usually allowed to enter Indonesia to help prepare and set up projects that require their specialist skills, in order to eventually pass on their technical knowledge to the domestic workforce.

         According to BKPM Head Thomas Lembong, the percentage of Chinese workers in Indonesia is relatively small compared to China's overall investment in the country.

         Only 3,718 Chinese nationals worked on Chinese projects in Indonesia between January and September 2016. This was only about 0.3 percent of the total workers employed for these projects during the same period, which totaled 975,898, said Lembong in a recent press statement.

          The total number of workers comprised of 17,966 foreign expatriates along with 957,932 Indonesia workers.

         "The rumors that Indonesia is being flooded by 10 to 20 million Chinese workers are deplorable," Lembong added.

         To stop the false reports of the mass influx of Chinese workers, House Deputy Speaker Agus Hermanto has called on the government to resolve the issue by announcing the correct data on the number Chinese workers entering Indonesia in a transparent and comprehensive manner.

         He also blamed the government's liberal immigration policies, which are designed to lure foreign tourists to the country, for the increased numbers of visa and working permit violations by foreigners.

         Meanwhile, China's Chamber of Commerce and Industry have complained about Indonesia's visa application process for Chinese nationals and warned that it posed a special challenge for Chinese investment in the country.

         "Indonesia's long and complicated process for visa applications is a problem for Chinese investors looking to do business in the country who are applying under KITAS (limited stay permit)," said the deputy chairman of China's Chamber of Commerce and Industry, Liu Cheng, at a press conference on Jan 18.

         In addition to the visa issue, alleged cases of local corruption have caused some Chinese businessmen to abuse KITAS when employing Chinese nationals at their businesses in Indonesia.

         "We admit that some Chinese businessmen in Indonesia have misused their working visas or that new companies that do not fully understand the local working permit regulations have been misinformed by some agents to misuse KITAS unintentionally," he added.

         However, this issue must not be used to judge all Chinese companies in Indonesia because many also legally employ foreign workers, such as the 201 members of China's Chamber of Commerce and Industry, according to Liu.

         He stated that all members of China's Chamber of Commerce and Industry abide by all Indonesian laws and regulations, including KITAS and rules on business permits.

         "To improve legal awareness, we will increase our counseling for Chinese companies, especially the new firms that wish to invest or operate in Indonesia," he promised. ***2***
(f001/INE)        

EDITED BY INE

(T.F001/A/BESSR/Suharto) 20-01-2017 20:33:07