China dominates trade in Indonesia and Australia

By Leah Holt

A new report released by The Australia-Indonesia Centre and EY Sweeney has conducted qualitative and quantitative research into the perceptions of Australians towards Indonesia and Indonesians towards Australia. One key finding is that China dominates trade in both Australia and Indonesia.

Indonesia Perspective

When asked about Indonesia’s trading partners, Australia ranked fifth with 21% while China dominated the list at 63%, highlighting Australia’s lack of importance as a vital trading partner to Indonesia.

According to the report, Australia was ranked significantly lower in terms of being important to Indonesia future in Jakarta (4th with 19%), Bandung (7th with 16%), Semarang (5th with 11%) and Padang (5th with 18%).

In contrast however, Australia was ranked higher in Surabaya (1st with 54%) and Makassar (2nd with 45%). The study claims that these differences are the result of ‘outward focus’ and being two of the most easterly cities in the sample group.

 Australian Perspective

Survey results revealed that 75% of Australians nominated China as Australia’s biggest trading partner. Indonesia ranked 4th with 11%.

Interestingly, the survey also revealed that Australia displayed a lack of understanding of the definition of trade and an inability to highlight any prominent Indonesian companies or what list  any products that are exported from Indonesia.

Challenges

In Indonesia, the main challenge was talking about trade to the general public as it is not a top priority for most Indonesians. While trade is linked to prosperity at a national level, how this translates to personal benefit is unclear.

Similarly, in Australia, there is a lack of awareness around the existing nature of trade particularly in regards to other countries. The study found that while Australians think Indonesia is an important partner in trade, there is a lack of appreciation for the size and economic scale of Indonesia.

Underlying recognition of trade importance

The research revealed a clear distinction across the two countries around how trade is viewed. Indonesians focus on imports while Australians talk more about exports and who the country sells to.

Regardless of how they think about trade and China’s position as the top trading partner, there is an underlying recognition of trade importance between neighbours. The study found that 65% of Indonesians agree that Australia is an important trading partner for Indonesia and 51% of Australians agree that Indonesia is an important trading partner for Australia.

Potential exists to create a positive foundation for building future dialogue around Indonesia and Australia as trading partners. But both nations must express their mutually beneficial trade initiatives in a regional context first before they can bring them to life collaboratively.



Categories: Economies

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