Indonesian deal with Alibaba platform could offer a cure for ASEAN-China trade ills

By Hu Weijia Source:Global Times Published: 2016/7/11 1:18:01

While others focus on the dispute among China and some Southeast Asian countries over the South China Sea, economic circles within ASEAN countries seem more interested in practical problems such as how to explore their potential markets in China by utilizing e-commerce.

According to media reports, Indonesia is teaming up with Chinese e-commerce giant Alibaba Group to launch an Indonesian platform named Inamall on Alibaba's Tmall Global, a marketplace for overseas goods to be sold online in China.

Local media like The Jakarta Post applauded the efforts and pointed out that Indonesian producers can now sell their products directly to Chinese consumers without going through importers or distributors.

The news came after Indonesia registered a trade deficit of $5.7 billion with China in the first five months of the year. An article recently published on the website of the Economic and Commercial Counsellor's Office of the Embassy of China in Indonesia pointed out that the Indonesian government had focused on Chinese market to help the country achieve its annual export growth target for 2016. It seems Alibaba has now become a major tool for Indonesian authorities to boost the nation's exports and balance bilateral trade.

Similar scenarios can be seen in some other Southeast Asian countries. Due to an economic structural imbalance, ASEAN countries are among China's major export markets for high-value-added products like mechanical and electronic equipment, but most Chinese imports from ASEAN countries are low-added-value products such as agricultural goods. What economic circles in ASEAN countries really care about now is how to boost export sales in traditional areas while diversifying their export portfolio to sell more to China, which is one of their major overseas markets.

One key issue for the prospects of China-ASEAN cooperation is the question of how ASEAN countries can gain benefits from China's economic rise and its vast consumer market. In this regard, Alibaba's role may make a useful contribution.

Online shopping in China has soared in recent years, with media reports showing that the volume of e-commerce in April 2016 was 12 times larger than it was in January 2011. The success achieved by online platforms in China would help made-in-ASEAN products - which tend to have something of a price advantage - become more popular in the country following the launch of marketplaces like Inamall.

The convenience of opening shops on Alibaba's e-commerce platforms also means that numerous small entrepreneurs in ASEAN countries can now flood onto the Chinese market, allowing ordinary people in those nations to benefit from China's rapid economic growth.

There has been a lot of discussion about how the rise of Internet-related sectors can reshape the global economy, but less attention has been paid to its influence on geopolitics. We believe that Alibaba has no intention of participating in regional politics, but it may take on a subtle role if it can help stave off the chronic illness of trade imbalance between China and ASEAN countries.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: Eye on The Economy

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