Opportunities and Challenges in Indonesia–China Relations: Service and Labor Sectors



Free-trade agreement (FTA), which is basically an economic cooperation between countries, is practically indispensable from each country’s political development. A number of bilateral and multilateral FTAs were meant to foster trade and economic relations among the members with the hope that each country member will be more competitive in the international and regional levels. However, the FTA brings lots of consequences on regulation, infrastructure, and all the things necessary to meet the agreed standards, which usually include the traffics of goods, investment, finance, and services. The coming of foreign investment and products brings both positive and negative impacts on Indonesia. Among the political and security issues that Indonesia should deal with is its weakening control to manage the presence of foreign products. It includes, particularly, service products by foreign workers as well as their harmful effects on the domestic products. The question is whether Indonesia can utilize the agreement to fulfill its national and develop its labors’ skills. If not, Indonesia is at the risk of losing its sovereignty in service and labor sectors due to its inability to safeguard its national interests. This chapter attempts to answer the extent to which Indonesia’s interest in its relationship with China in the context of service and labor sectors. This paper begins with a general assessment on the needs and interests of Indonesia and China in the service and labor sectors.


ACFTA Foreign investment Indonesia’s interest Service and labor sectors 


  1. ASEAN Economic Blueprint. 2009. Roadmap for an ASEAN Community 2009–2015, ASEAN Secretariat, Jakarta.Google Scholar
  2. Angang, Hu and Sheng Xin. 2007. Urban unemployment in China: A background analysis (1995–2003). In Unemployment in China: Economy, human resources and labour markets, ed. Grace O. M. Lee and Malcolm Warner. London: Routledge.Google Scholar
  3. Directorate of Balance of Payment and International Economic Cooperation. 2004. Perkembangan Jasa-Jasa dan Posisi Indonesia dalam Perundingan GATS ke Depan. Jakarta: Bappenas.Google Scholar
  4. Elisabeth, Adriana (ed.). 2009. Menuju Pembentukan Komunitas Ekonomi ASEAN. Jakarta: LIPI Press.Google Scholar
  5. Hew, Denis (Ed.). 2007. Introduction: brick by brick—The building of an ASEAN Economic Community. In Brick by brickthe building of an ASEAN Economic Community, ed. Denis Hew. ISEAS, Singapore.Google Scholar
  6. Introduction to ASEAN Framework Agreement on Services (AFAS). Accessed on 24 Aug 2010.
  7. Juoro, Umar. 2009. Arah Investasi Cina Di Indonesia, August 20, 2009. Accessed on 23 Oct 2011.
  8. Law No. 3/1958 on Placement of Foreign Workers.Google Scholar
  9. Law No. 1/1967 on Foreign Investment.Google Scholar
  10. Law No. 13/2003 on Manpower.Google Scholar
  11. Law No. 25/2007 on Investment.Google Scholar
  12. Law No. 7/1994 on Ratification of Agreement Establishing the World Trade Organization.Google Scholar
  13. Lim, Ivan and Phillipp Kauppert. 2010. Dilema Politik Dalam Menghadapi CAFTA: Apa Pilihan untuk Indonesia? Jurnal Sosial Demokrasi 8(3).Google Scholar
  14. Pudjiastuti, Tri Nuke. 2009. Kepentingan Indonesia dalam Komunitas Ekonomi ASEAN. In Menuju Pembentukan Komunitas Ekonomi ASEAN, ed. Adriana Elisabeth, 188–189. Jakarta: LIPI Press.Google Scholar
  15. Statistics Press Release, No. 33/05/Th. XIII. 2010, May 10.Google Scholar
  16. Sungkar, Jasmin. 2009. Isu Perdagangan Bebas Barang dan Jasa dalam Komunitas Ekonomi ASEAN. In Menuju Pembentukan Komunitas Ekonomi ASEAN, ed. Adriana Elisabeth. LIPI Press, Jakarta.Google Scholar
  17. The Provisional People’s Consultative Assembly Number IV/MPR/1973 on the importance of wider employment opportunities for the Indonesians Kompas, 21 June 2011.Google Scholar
  18. Webber, Michael and Zhu Ying. 2007. Primitive accumulation, transition and unemployment in China. Unemployment in China: Economy, human resources and labour markets, ed. Grace O.M. Lee and Malcolm Warner. London: Routledge.Google Scholar
  19. WTO Trade Statistics, 2007.Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. and Indonesian Institute of Sciences (LIPI) Press 2018

Authors and Affiliations

  1. 1.Center for Political Studies, Indonesian Institute of Sciences (P2P-LIPI)JakartaIndonesia

Personalised recommendations