An official from an industry association warned that if the Government cannot stop China’s chronic dumping, Indonesia’s frail garment industry may have to lay off hundreds of thousands of workers this year.
The chairman of the Indonesian Filament Yarn and Fibre Producers Association, Redma Gita Wirawasta, stated that dozens of companies are in danger of closing because they are unable to compete with the low-cost clothing made in China that has been flooding the market in recent years.
According to one Government estimate, Indonesia’s textile industry, which employs a large number of people in the country, lost almost 80,000 jobs last year alone as it battled to compete with its neighbours in the area.
“The Southeast Asian country’s ability to effectively restrict illegal products from entering at the ports is part of the problem for textiles,” Redma added.
An enormous illegal market from China is a problem for Indonesia; according to Redma, on average, 1,000 containers arrive at its borders each month. A large portion of the smuggled goods are subsequently sold in local markets and on internet marketplaces. Prices have been squeezed below production costs as a result, he claimed.
Redma is also concerned that any tariffs imposed by the new Trump administration would make the flow of Chinese goods worse, which would put further strain on domestic businesses.
This week, local media reported that Airlangga Hartarto, the Coordinating Minister for Economic Affairs, expressed his desire to negotiate a reduction in tariffs for Indonesian commodities with the new Trump administration.
