Post global financial crisis in 2008, most countries all over the world are still struggling to recover their economy. In 2014, the global economic growth, based on IMF data, was at 3.3%. IMF predicts the economy growth in 2015 will slightly increase by 0.2%. This prediction is lower than the previous prediction which was at 3.8%. The prediction of World Bank for global economic growth is worse than the IMF prediction. The World Bank predicts the global economic growth will be at 3% in 2015. Meanwhile, the economy growth of Indonesia was at 5.02% in 2014 lower than the economic growth a year earlier, at 5.58%, but higher than the global economic growth.
Bank Indonesia, the central bank of Indonesia, predicts the Indonesia economic growth will be better in 2015. Bank Indonesia predicts the economy growth will be around 5.4% to 5.8% in 2015. The prediction is in line with the prediction of IMF and the World Bank in which the global economic growth will be higher than in 2014. One way to achieve the Indonesia economic growth is by increasing the export volume. In 2013, Japan and China are the first and the second respectively main destination to export Indonesia products and services. However, those countries are facing economic growth at the moment. The essay aims to discuss the prediction of China economic growth and the alternative importer country for Indonesian products and services.
The China economic growth will be lower in 2015 rather than in 2014. China government has set target of economic growth in 2015 at 7%. This target is lower than the economic growth in 2014, at 7.4%. The slowdown of China, the world’s second-largest economy, is caused by the cooling of property market, slowing factory activity, and weaker investment. However, Asian Development Bank (ADB) predicts the economy growth of China in 2015 will be at 7.2%. The economic growth of China becomes main concern of many countries because China is the trigger to grow global economy particularly post global financial crisis. On the other hand, the Japan economic growth was at 0.9% in 2014, lower than at 1.5% in 2013. The economy of Japan is predicted decreasing steadily to 0.6% in 2015.
The decrease of economic growth in China and Japan obviously affect the export values of Indonesia to these countries. In 2013, the values of Indonesia export to China were at US$ 22.60 billion compared to US$2.77 billion in 2000. However, these values are still lower than export values of Indonesia to Japan. In 2013, the export values of Indonesia to Japan reached US$ 27.09 billion (Yudhistira, 2014). Regarding to the economic growth at those countries, it is believed the amount of Indonesia export will decrease. Hence, Indonesia should increase the export values to the other countries in order to achieve economic growth target.
India can be alternative country to enhance Indonesia export values. ADB predicts the India economy growth will exceed China in 2015. The economy of India, the third largest economy in Asia, will grow about 7.8% in the 2015 financial year, higher than economy growth in 2014 at 7.4%. This prediction is lower than the official prediction made by India government in which the economy growth is predicted at 8.5% in 2015. However, the ADB predicts the economy growth of India will be above 8% in following year in which the India economic growth will be at 8.2%. Indonesia and India already have good relationship since long time ago. This relationship is essential for Indonesia in order to increase the export values to India.
Similar to China, India nowadays has transformed to be industrial country which needs natural resources and energy to run the industries in its country (Barry, 2013). Therefore, Indonesia should capture the opportunity by producing products which is needed by the industries in India. Nevertheless, India is the main the destination for commodity export in particular farming products, while China is the second main destination (Pusat Data dan Sistem Informasi Pertanian, 2013). In addition, Banks in Indonesia also should enhance cooperation with banks in India. Bank has important responsibility in international trade in which bank is an intermediary institution to settle the payment both exporter and importer. As a result, bank will obtain fee-based income from the international trade. Therefore, the cooperation of Indonesian banks and India banks will be mutual benefit.
To sum up, the economy growth of China and Japan is predicted lower than a year earlier. Conversely, the India economic is predicted to remain growing higher than a year earlier. Regarding to the prediction of the economy growth, India can be alternative country to enhance export values of Indonesia products. This opportunity also should be captured by banks because banks have essential role in international trade, besides profit obtained by banks.
References:
Yudhistira, Aria W., 2014. Perdagangan dengan China Melesat Paling Cepat. Katadata.co.id.,14 May. http://katadata.co.id/berita/2014/05/14/perdagangan-dengan-china-melesat-paling-cepat (accessed 29 March 2015).
Bary, Pakasa, 2013. Prospek Perdagangan Indonesia, Cina, dan India melalui Analisa Gravity Model.
Pusat Data dan Sistem Informasi Pertanian, 2013. Ekspor Impor Komoditas Pertanian. Buletin Triwulan. Sekretariat Jendral, Kementrian Pertanian.
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