CHINA-ASEAN FTA TO BENEFIT CHINA, RI: ENVOY

Jakarta, Aug 7 (ANTARA) - The China-ASEAN Free Trade Area which is to come into effect in 2010 will benefit both China and Indonesia, a Chinese envoy said.

"We must look at the matter comprehensively based on long term interests, for instance, the current deficit in Indonesia's trade with China," Chinese Ambassador to Indonesia Zhang Qiyue said in a statement on Thursday.

Zhang said China's exports to Indonesia were currently dominated by equipment badly needed to support the development of the latter's infrastructure facilities.

After the formation of the free trade area, 93 percent of China's imports from Indonesia would be exempted from import duties, she said.

"This will be a very good and wide chance for Indonesia's exports," she said.

In line with the increasingly closer trade relations between the two nations, China's investments in Indonesia had grown significantly, she said.

By the middle of 2009, China's non-financial investments in Indonesia reached US$99.25 million, up 375 percent from the same period last year, she said.

Deputy chairman for trade, logistics and distribution of the Indonesian Chamber of Commerce and Industry (Kadin) Beny Sutrisno said recently Indonesia's trade surplus with China had dropped significantly since the signing of the FTA in 2004.

The drop was marked by a decline in Indonesia's trade surplus with China to a deficit of US$3.61 billion in 2008, he said on the sidelines of a discussion on the anticipation of ASEAN-China FTA in 2010 at the hall of the Indonesian Textile Industry Association (API) here.

Indonesia's trade deficit with China in the non oil and gas sector was also large, falling from a surplus of US$79 million in 2004 to a deficit of US$7.16 billion in 2008, he said.

Besides, he said, in 2008 Indonesia's trade balance also tumbled from US$32.75 billion in 2007 to only US$23.31 billion in 2008.

The decline was mostly experienced by the non oil and gas sector, reaching 42.5 percent, he said.