A Study On The Prospects,Risks And Countermeasures Of Investment In Indonesia For Chinese Iron And Steel Enterprises

As China has entered the period of New Normal,strengthening the investment in emerging market countries and regions is an important way for Chinese iron and steel enterprises to resolve the excess capacity and improve the living environment.Indonesia is an important part of China's all-round construction of the Belt and Road,along with the strategic of building “Global Marine Fulcrum” being proposed,the large-scale infrastructure construction projects have been started,and the country's economy growth speeds up sharply in recent years,so the prospect for steel industry is considerable in the future,which has aroused great concern from global iron and steel enterprises.Firstly,this paper made a discussion on the general situation of the steel market in Indonesia from three aspects——iron and steel production&consumption,import &export,China's iron and steel exports to Indonesia,the results showed that supply and demand is unbalanced in Indonesian steel market,local iron and steel consumption is heavily dependent on imports,and China plays an important role in ensuring the safety of Indonesia's imports.On this basis,the paper focused on the prospect and risk of Chinese iron and steel enterprise to invest in Indonesian market.In the aspect of prospect,the paper made an empirical study on the potential of steel consumption in Indonesia by using VEC model,the results showed that the apparent consumption of finished steel in Indonesia in 2020 is expected to reach more than 16 million tons.In the aspect of risk,the risk of Chinese iron and steel enterprises to invest in Indonesia mainly came from Indonesia and Chinese iron and steel enterprises,the former included government corruption,inefficiency,policy instability,inadequate supply of infrastructure,lack of financing channels,the latter included management risk,financial risk,human resource risk,personal and property safety risk.Lastly,the paper proposed some suggestions,involving establishing joint venture with local partners,establishing strategic alliance with down-stream enterprises,taking risk prevention measures,increasing investment in trade channels,etc.