China Interested in Investing in Textile Machinery

The Vice President of China Hi-tech Group Corporations, Maoxin Ye, is very enthusiastic about building a machine spare parts factory for the textile industry in Indonesia. We are ready to transfer the technology and we are financially ready to fund the project, he said yesterday.

Compared to China, which owns 100 million mills, Indonesia only has eight units. So, China is very interested in taking part in the textile machine restructuring program in Indonesia.

However, Maoxin did not mention the amount of investment that will be carried out. He only hoped that the government will facilitate their plans, for instance by providing tax and import tax breaks. We hope to be treated like an Indonesian company.

Ade Sudrajat, the Indonesian Textile Association Chairman, said the Chinese delegates along with nine representatives of their subsidiaries are here to conduct a survey. China's investments have been rising, as evident in the opening of a service center in Semarang. Gradually, investments are expected to include the spare parts industry and the construction of an assembling plant.

The spare parts manufacturing investment is planned after four million units of China��s textile machines have been absorbed back home in China. When eight million units have been absorbed, then China will invest in machine assembling.

If China invests in machine assembling, production of textile machines will no longer be intended to meet local demand. The machines will be exported to other developing countries that are also the main producers in the textile industry, like India and Pakistan.

The change towards Chinese products because the quality of the machine and production is as good as that of Japan and Europe. Moreover, Chinese machines are more energy-saving. Chinese investors have been invited to invest in Indonesia to support the government��s plan to restructure the industry.

Currently, out of eight million textile machines in Indonesia, two million are made in China, while the other six million are over 20 years old.

Industry Minister M.S. Hidayat said that Chinese businessmen came in response to the results of recent meetings held by the government in Beijing last month. Within the next five years, China's investments are expected to include the production of textile machines and spinners, waving, and all kinds of industrial textile machines.

At present, textile machine imports for the restructure program have been 10 percent subsidized by the government. The subsidy will be increased to 15 percent if the machine manufacturers agree to build their plants in Indonesia.