Indonesia benefiting as China’s shoemakers shift production as US trade war worsens, central bank official says
- Bank Indonesia deputy governor Dody Budi Waluyo sees positives as footwear exports to the United States have grown 6.7 per cent at the start of 2019
- But Southeast Asian nation is also tipped to join other regional markets in cutting interest rates to counter slowing global growth
Indonesian exports are gaining market share in the United States in some sectors as supply chains shift away from China’s manufacturing base to the Southeast Asian nation, even though the trade war has hurt more than benefited emerging economies, said Bank Indonesia deputy governor Dody Budi Waluyo.
In particular, Indonesian footwear exports to the US are seeing “some progressive performance”, Waluyo said.
In the first four months of 2019, Indonesia exported footwear worth US$559.91 million to the US, up 6.7 per cent from a year earlier. The country’s total footwear exports last year rose 6.5 per cent, well above the 3.5 per cent increase from 2017, according to the Indonesian Footwear Association. Of that, exports to the US gained more than 4.7 per cent to US$1.55 billion last year, compared with the 3.5 per cent rise in 2017, based on data from the US commerce department.
In contrast, shipments from China to the US, which has traditionally accounted for more than half of the US’ footwear imports, slipped 1 per cent to US$13.89 billion in 2018.
As the escalating trade tensions between the world’s two largest economies have taken a bite on the Chinese and American economies, Southeast Asian countries like Vietnam and Indonesia have gained in certain industries as companies diversify operations to these markets to avoid tariffs imposed by the US.