Chinese prepare for quiet assault on Indonesian markets

04 Dec '09

2 min read

The New Year will herald the beginning of the free trade agreement that the ASEAN countries, which also includes Indonesia have signed with China, which entails China to export a host of goods duty free to these countries, which also includes textiles and clothing.

As it is, the Indonesian domestic markets have already been swamped by imported textiles and apparels and if experts are not proven wrong, the share of textile and garment imports in the domestic markets could touch around 50 percent by the end of this year, even before the FTA comes in to effect.

January 1, will bring in another wave of assault from the Chinese, who are the powerhouse and market leaders in the global textile and clothing trade and according to industry sources, the Chinese have quietly started planning for the d-day.

It seems they are signing agreements with traders and distributors in the main major textile markets in Jakarta and Surabaya and also trying to convince an entire floor of dealers in the Tanah Abang market in Central Jakarta in to selling only Chinese goods.

The textile industry had opposed the opening of the Indonesian markets on January 1, 2010 and requested the government to extend the deadline by two more years, to give enough time for the industry to improve their competitiveness.

Indonesia is already facing a negative balance of payments with respect to the bi-lateral trade in the textiles and garment sector with China and experts aver that, this FTA will further widen the negative balance of payments in favour of China.

It is also expected that the share of the local textile sector in the domestic markets will fall further, once the markets are opened up and will add to the distress and stress the industry is facing, with exports also witnessing a slowdown, since the last one year.

Fibre2fashion News Desk - India

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