Finance Minister Sri Mulyani Indrawati stated that Indonesia needed to anticipate the economic rebalancing process in China, even though the economic recovery was taking place and provided a basis for optimism.
The rebalancing in China, said Sri, will be able to affect commodity price fluctuations. It also has a negative impact on the entire world economy.
According to BCA Chief Economist David Sumual, the rebalancing process in China will carry risks in the short term, but will generate potential or opportunities, especially for Indonesia in the medium-long term.
In the short term, as in other countries with faster tapering, David said the rebalancing process will have an impact on the financial sector. Not only China, countries such as the United States and Canada in the near future will reduce stimulus and liquidity intervention as the economy recovers in their respective countries.
"Moreover, China was the first to [recover]. That is what we have to watch out for in the possibility of accelerating economic recovery in other countries which will have an impact on our financial sector. The turmoil can arise from outflows of funds, from portfolio investments, especially stocks and bonds," explained David.
On the other hand, in the medium-long term, David believes that rebalancing in China can open up opportunities, especially in the export sector. David said the rebalancing in China was carried out to balance the portion of the external sector such as investment, and internal or public consumption to GDP.
By targeting this balance, David said Indonesia's export opportunities could be even greater along with the increasing consumption in China during rebalancing.
"Could it be an opportunity why? Because China is rebalancing their economic structure. So far, [China] is heavy on investment, so its share of GDP is almost 50 percent. small community so far," he explained.
David then gave an example of Indonesia being able to target exports such as processed minerals. He also said that Indonesia could take advantage of export opportunities for sectors with high employment absorption, such as textiles or shoes.