China’s trade with Indonesia surges almost 30 per cent thanks to jump in commodity prices, raw material demand
- Imports of Indonesian goods grew 31.1 per cent between January and August compared to the same period in 2021
- Chinese exports to Indonesia were 26.2 per cent higher in the first eight months compared to January–August last year
A surge in commodity prices pushed the value of trade between China and Indonesia up 28.6 per cent in the first eight months of the year, as the world’s No 2 economy leaned heavily on the Southeast Asian nation for metals and energy to supply its giant manufacturing sector.
Only Russia traded more with China between January and August, customs data showed, with Chinese imports of Indonesian goods reaching US$48.41 billion, up 31.1 per cent over the same period in 2021.
Exports to Indonesia grew to US$47.28 billion, which was 26.2 per cent higher than January–August last year.
The price hikes hit China hard as a major manufacturer and buyer of iron ore, copper, crude oil and other raw materials.
“The jump in commodity prices will explain a large part of why the dollar value of Indonesia’s exports to China has increased so sharply,” said Gareth Leather, senior emerging Asia economist with Capital Economics in London.
A “key factor” that raised China’s total imports from Indonesia during the first eight months of 2022 was a doubling of Indonesian thermal coal prices due to impacts of the Russia-Ukraine war, said Rajiv Biswas, Asia-Pacific chief economist with S&P Global Market Intelligence in Singapore. The Indonesian government’s reference price for thermal coal was US$321 per tonne in August.