| The purpose of paper is to assess entry mode and local partner selection by Chinese multinational corporations(MNCs)investing in Indonesia.By leveraging press releases and interviews with professionals,this study has identified fifty Chinese MNCs committing foreign direct investment(FDI)across various economic sector(e.g.agriculture,automotive,finance,information technology,infrastructure,manufacturing,mining,energy,and others).A large portion prefers joint venture as their main entry mode,especially in mining and infrastructure business.Their entry choice is mainly driven to overcome Indonesia's raw mineral export ban policy and realizing intergovernmental cooperation in infrastructure projects.Smaller portion channels their FDI through wholly-owned subsidiaries,acquisition and export of production facilities.These preferences are due to Indonesia's liberal stance for foreign investments on manufacturing,financial service and energy sectors.Furthermore,thirty five out of the fifty Chinese MNCs have been identified to cooperate with local partners in the host country.Majority tends to collaborate with domestic companies which are ultimately owned by local ethnic Chinese entrepreneurs.However,their partnership are limited to sectors where the local Chinese are relatively competitive at,such as agriculture,manufacturing and mining industry.In addition,this paper also articulates the role of China's foreign policy manifested through its outward FDI in influencing orientation of Indonesia's economic reform,especially in supporting the entry of Chinese FDI in capital and labor-intensive industries.In conclusion,this study echoes the unique relationship between the mainland Chinese and the local Chinese Indonesian business that can be used to leverage more entry of Chinese FDI to the host country. |
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