Southeast Asian tour to see multi-billion dollar deals signed
Sept. 26 – Chinese President Xi Jinping will make a special address to the Indonesian Parliament on his short Southeast Asian tour next week, a first and rare honor for a visiting Chinese politician.
Xi’s visit is expected to oversee some US$20 billion of trade deals signed, including a joint venture between a consortium of Chinese state-owned enterprises and Indonesian companies to develop the Jakarta monorail system. An RMB-Rupiah currency swap deal is also expected to be agreed upon.
The China-Indonesian trade corridor has been growing rapidly in recent years, developing from US$26.6 billion to 2009 to an expected US$80 billion by 2015. Chinese foreign direct investments into Indonesia last year reached US$2.2 billion, and over 1 million Chinese tourists visited in what is fast becoming one of China’s most important Southeast Asian markets. China has a double tax treaty with Indonesia, the details of which can be viewed at our ASEAN Briefing website here.
Following his two day Indonesian trip, Xi will visit Malaysia, where additional deals are expected to be signed. Malaysia is the world’s largest rubber producer and China the world’s largest buyer. Bilateral trade between China and Malaysia reached US$54.8 billion last year and is expected to hit US$70 billion this year. The China-Malaysia double tax treaty can be viewed here.
Following these two trips, Xi will attend the annual APEC CEO Summit of global leaders, an invitation-only event at which U.S. President Barrack Obama and Russian President Vladimir Putin will also be present, in addition to other prime ministers and senior corporate executives from around the region.
“The development of Chinese trade across Asia is an interesting trade dynamic and one that is seeing growth rates of 8 percent plus across multiple Asian economies,” comments Dezan Shira & Associates’ Founding Partner Chris Devonshire-Ellis, who will also be in attendance at the APEC CEO Summit. “International media has long concentrated on China’s trade relationships with the United States and the West, whereas the real success story and growth dynamics for Chinese outbound investment remain closer to home.”
Devonshire-Ellis’ comments earlier this week concerning the immediate prospects for the economies of all Asian nations can be viewed on the Pan-Asia Indicator on our Asia Briefing website.
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