Can Indonesia Weather A Global Recession by Working Closer with China?

“We lost a lot as India now gets their supply from Malaysia. Now, where can we sell those supplies of palm oil? China is most prepared to buy it,” said Yudhistira.

However, Jokowi did succeed on Tuesday in getting China to agree on importing an additional 1 million tons of crude palm oil, while prioritizing imports of agricultural products from Indonesia, according to Indonesian Foreign Minister Retno Marsudi.

As comprehensive strategic partners, Indonesia and China must fill its partnership with cooperation that is mutually beneficial for the two countries, for the region and for the world

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— Menteri Luar Negeri Republik Indonesia (@Menlu_RI) July 26, 2022

Having China as a top trading partner, however, comes with problems. Several ambitious China-funded infrastructure projects were allegedly plagued by problems like substandard planning and negative environmental impacts.

Yudhistira warned that without proper oversight, mega infrastructure projects could bring long-term consequences to the economy.

The economist added it would be a mistake to disregard long-term negative impacts, as China offers plenty of liquidity that Indonesia needs right now.

“We must learn to be selective like Malaysia. They do not say yes to all projects, but rather select which projects will benefit society and the environment.”