Indonesia's Trade Position against China: The Application of NTM in Indonesia for Imported Machinery Products and Electrical Equipment from China

Abstract

The international balance of trade is one of the crucial things regarding to one country's economy. It is very ideal if a country's export value exceeds its import value. The Indonesian government needs the international balance of trade on a regular basis, especially in the midst of competition in the MEA and internationally. One of Indonesia's international trade partners is China. Indonesia's trade position against China is very unfavorable, due so many imports compared to Indonesia's exports of Chinese products. This study aims to measure the effectiveness of the Non-tariff Measures (NTM) policy issued by the Indonesian government aimed at controlling the volume of important products from China, especially for the two largest main products, namely machinery products and electrical equipment. This research is a descriptive study with secondary data analysis that already collected from 2017 to the latest data. The data is processed to measure the accuracy of the NTM based on indicators from the particular relevant Ministries. The results of the study concluded that the NTM policies issued by the Indonesian government were still too few and ineffective to control imports from China, so this condition is jeopardizing for Indonesia's trade balance because it consumes the national foreign exchange.