Chinese Companies Draw Interest on Central Java Industrial Estate due to Improvements

August 10, 2020

The commitment from Central Java government to improve their region for attracting domestic and foreign investors have positive results. In 2019, at least 59 Chinese investors relocated their businesses from Jakarta to some areas in Central Java industrial estate. Data from Indonesia Investment Coordinating Board (BKPM) suggested that most of companies come from wood and furniture manufacturers. The head of BKPM, Bahlil Lahadalia, stated that the innovation done by Central Java government attracted business owners to set the deals with the province (source: Tempo).

Easier and shorter steps on obtaining business and license permit is part of transformation done by Central Java government. Governor Ganjar Pranowo realized that easiness on doing business is the main factor to attract investors. Therefore, he made sure that the department of Capital Investment and One Stop Integrated Services Agency to create business friendly regulations. In addition, he also improved the infrastructures for the development of Central Java industrial park(s). These potentials have been showing positive results for the past three years.

For instance, CentralJava had won Investment Award in 2018 from Indonesia Investment Coordinating Board as the best province in providing one-stop integrated service at the nation. This achievement followed by the expansion of 2,000 hectares for Chinese furniture manufacturing industries. In addition, Chinese investors also promised to develop local woodcraft industry in Central Java to be more competitive at the markets.

Furthermore, Central Java government reform on business sector smoothens the development of Kendal Industrial Park in the region of Kendal, 25 km from Semarang (capital city of Central Java). This industrial park itself received its status as special economic zone in 2019. This means Central Java will gain enormous advantages in terms of investments, regional income, and increasing job markets in the province.

Based on annual report from Central Java government to BKPM, there are at least 50 trillion rupiahs (US$ 3,5 billion) of investment value, achieved by the province in 2019. More than half of them came from foreign investment, and there was around 15 trillion rupiahs (US$ 1,05 billion) coming from local investors. It is predicted that after the first phase of Kendal Industrial Park finished in 2021, the investments will be risen up as more Chinese investors have been starting the business talk with the government (source: Jakarta Post).