The Impact Of Indonesia’s Localized Procurement Policy On Multinational Corporations

In the complex and volatile global economic environment,more and more countries hope to improve their economic situation by attracting foreign investment rather than direct imports.To this end,various host governments have formulated various localization procurement policies and trade barriers and other binding policies to protect the development of their enterprises and economies.Based on a study of the historical literature on localisation procurement policies at home and abroad,this thesis uses comparative methods,SWOT theory analysis,case studies and empirical analysis to study.Firstly,the current situation of localisation procurement policies in Indonesia and the impact of localisation procurement policies on multinational companies.Secondly,using the 2X50 MW EPC+OM coal-fired power plant project in Indonesia,which was constructed and invested by SH,in which the author personally participated,as a case study,to summarise the localisation policies in Indonesia.Third,using empirical analysis,the impact of localization procurement policies at home and abroad on procurement,employment and economic development as well as countermeasures are studied;Fourth,the impact of Indonesia’s localization procurement policy in terms of quantity on the scale of China’s imports is studied;Fifth,constructive suggestions are made for how localised sourcing policies should be determined in host countries such as Indonesia and how Multinationals,especially Chinese enterprises,should respond to localised sourcing policies.The conclusion reached is that Multinationals,especially Chinese enterprises,need to study the host country market and localisation policies in advance when undertaking EPC projects or foreign investments,and do a good job of responding to them in advance;for host countries such as Indonesia,it is not better to have a higher proportion of localised procurement,nor is it better to have more localised procurement policies for Multinationals.How Multinationals can achieve corporate development under the localisation procurement policies of each host government is the focus of this thesis.