Capital Inflows From China To Indonesia Remain Strong: Bappenas

Jakarta (Antara Bali) - China's stock exchange fall would not put a brake on capital inflows to Indonesia from that country, the National Development Planning Board (Bappenas) said.

On the contrary, Chinese investment in the real sector is expected to increase as Indonesia is one of the favorite places for relocation, Andrinof Chaniago, minister for national development planning /head of Bappenas, said.

Chinese interest in investment in Indonesia both in project cooperation and project financing  is still strong, Andrinof said here on Tuesday night.

He said the fall of the Chinese stock market has triggered worries of its impact on the global economy, but on the other hand there is potential outward shift in investment from China to other countries including Indonesia.

"They (Chinese investors) have to diversify  and find other places to invest their money. That would give an opportunity for Indonesia. The indications are obvious with the growing interest shown by Chinese investors here," he said without givi9ng details.

So far there has been no cancellation of the many commitments made with China in project cooperation, he said.

Chinese financing commitments  and project implementations are expected to increase in Indonesia. he added.

"They even compete against Japan to enter Indonesia to win contracts for infrastructure projects," he said.

Although Chinese investment in the real sector is still normal, the Shanghai share market fall  could lead to economic contraction that could have negative impact on Indonesia, especially in exports.

The world's second largest economy is one of Indonesia's main trade partners.

Chinese investment is growing in the country's major projects notably  in government's massive infrastructure projects.

Data at the Capital Investment Coordinating Board (BKPM) showed that Chinese investors are seeking to invest US$100 million in a number of shipyards in the country.

Chinese investors are involved in a number of government's  infrastructure development projects  such as in the construction of new seaports, airports, roads totaling 1,000 kilometers , rail tracks totaling  8,700 kilometers  and in the government's power generating program to build power plants with a total capacity of 35,000 megawatts until 2019.

Chinese investors are also studying cooperation  in the construction of a high speed train between Jakarta and Bandung in which strong interest has also shown by Japanese investors.

The index of the Shanghai Stock Exchanged has dropped 30 percent since June 12, 2015 causing fears of its impact globally. (WDY)