The Regional Comprehensive Economic Partnership (RCEP) is expected to play a large role in promoting economic and trade relations between Indonesia and China, Indonesian experts said.
“We’ve just fallen into recession and if RCEP is successful in improving economic relations, Indonesia will perhaps be able to climb out of recession through cooperation with China and other bigger economies,” Indonesian economic expert Nadhila Ichsan said.
According to Statistics Indonesia (BPS), the state’s economic growth experienced a 3.49 percent contraction in the third quarter of 2020, which brought the country’s economy to a recession for two consecutive quarters. In quarter two, Indonesia’s economy grew at a rate of -5.32 percent.
Although the country’s economy continued to contract, there was a significant rebound in exports, especially those to China. The data of BPS showed Indonesia’s largest non-oil and gas exports in October 2020 were to China.
Indonesian Finance Minister Sri Mulyani Indrawati at a press conference said, “The worst is over” and “All components of economic growth, both from the expenditure side and the production side, have increased.”
Murpin Josua Sembiring, an economic scholar, opined that the benefits from RCEP include creating opportunities for the Indonesian industry to take advantage of regional value chains, increasing high-quality telecommunication services, and triggering Indonesian investors to invest in the RCEP area.
RCEP will also greatly give benefits to financial service providers, create opportunities to increase economic capacity and the ability of small and medium-sized enterprises, boost intellectual property, expand digital trade in the region, and extend market access for Indonesian export products, he added.
Fifteen Asia-Pacific nations signed the RCEP, a mega free trade deal, on Sunday as they concluded an annual summit of Southeast Asian leaders and their regional partners, held virtually this year due to the pandemic.
The Regional Comprehensive Economic Partnership is the world’s biggest trade agreement. It will progressively lower tariffs across many areas in the coming years.