| The industrial economy,especially the manufacturing sector,plays an importantrole in national economy and has been regarded as the booster of economic development.During the period of 1970s and 1990s,the rapid development of manufacturing became the engine of Indonesian economic growth,making Indonesia one of "Tiger Cub Economies".However,the Asian financial crisis that broke out in 1997-1998,interrupted the normal process of Indonesian industrialization.In a result,Indonesian manufacturing has experiencing a relative recession since then.In details,the importance of Indonesian manufacturing in industrial structure,employment structure,international trade and international division of labor has decreased significantly compared to the past.This phenomenon occurs when GNI per capita and the level of industrialization is relatively low,is what economists called premature de-industrialization.There are many reasons for Indonesian premature de-industrialization.First of all,The changes in external economic environment are the most critical factors,such as the Asian financial crisis,the"Dutch Disease" caused by the international commodity boom,and the higher level of free trade leading to intensified regional trade.Meanwhile,after the Asian financial crisis,the political and economic environment in Indonesia has also undergone earth-shaking changes.On the one hand,the economic crisis has triggered a political crisis,Indonesia has shifted from an authoritarian system to a democratic system,which has changed the long-term environment for manufacturing development.On the other hand,since the 21st century,Indonesia’s production costs of domestic labor,capital and logistics have risen rapidly,weakening the international competitiveness of Indonesian manufacturing.In addition,after the global financial crisis in 2008,the industry competition around high-end manufacturing industry gradually intensified,but Indonesia is limited by its weak technical capabilities and shortage of high-quality labor,it is difficult to take the lead in the new round of industrial revolution.To solve the increasingly serious problem of premature de-industrialization,the Indonesian government has introduced a large number of industrial revitalization policies,which have finally formed a policy framework that complements each other in a long and short period of time,attempting to reinvigorate Indonesia’s manufacturing industry.According to the Indonesian government’s plans,Indonesia will become an industrial country in 2025 and become the world’s tenth largest economy.In order to achieve the above objectives,the Indonesian government is committed to promoting the development of priority industrial clusters,building economic corridors and industrial parks,promoting the development of the port manufacturing industry and improving the business environment,in order to provide new opportunities for Indonesian manufacturing sector,which has laid a solid foundation for cooperation between China and Indonesia in the manufacturing sector. |
