Impact of The Decline of China Economic Growth to Indonesia

After Greek bankruptcy, According the some news, the China economic growth is declining, moreover the stock index at China market is falling down.

It annoys me to know deeply about what happening in China and what the impact will affluence to Indonesia business environment, especially to my company business.

According to the Central bank governor, Agus Marto said that the declining 1% of China economic growth will impact the declining about 0,4% of Indonesia economic growth.

The big questions are why does China economic growth decline? And why have impact to Indonesia? And is it have impact to my company business?

P1-BS532_CHINAG_16U_20150119220313

the China economic slowdown mainly caused by slowdown of fixed assets investment especially real estate and manufacturing investment. This condition has impact to Indonesia which is the largest exporter to China in coal fired and crude palm oil. The exports of those commodities is fall both quantity and price. Meanwhile the tumbling of China stock caused by rush out of investors worrying about bubble on stock market where mostly investors buy stock with borrowing money. When the stock price drops, they quickly sell their stock in order to pay the loan.

Meanwhile,this condition more specifically impacts to the certain business in Indonesia. The company which rely on import from China such as in steel and construction Industry will got cheaper products. Because china will do everything in order to boost their economic growth, while their domestic demand is declining. On the other hand, the china electronic product also will sold cheaper.

But there are another factor which still hold up the china product price, It is dollar. When the transactions still using dollar rather than Yuan, the impact of China price down is not so significant. It because the Rupiah is still weak against dollars.
(my private analyst)

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