The Impact Of ACFTA On Indonesia-China Bilateral Trade Relations

Indonesia has joined into several cooperation agreements free trade area (FTA) with several countries; one of Indonesia’s involvements is the ASEAN-China free trade area (ACFTA). Theoretically, such cooperation will have a positive impact on its member states, as well as with the purpose of establishing the ACFTA is basically to build the economy of the countries. In this research, I analyze the impact of ACFTA on Indonesia-China Bilateral trade relations. The analysis covers the rate of growth of trade volume between Indonesia and China under ACFTA framework using comparative study approach by comparing three different periods of indonesia-china trade ties. The results showed that the ACFTA gives a positive impact on the growth of trade value for both of countries, but china is more advantaged in this relationship. The trade ties between the two countries tends to be an imbalanced relation, or not in accordance with the existing international trade theories. Through competitive advantages analysis, indicated that the main cause of imbalance trade ties between Indonesia and China mainly caused by internal factors, thus makes Indonesia has not been able to feel the positive benefits of the implementation of the ACFTA, and through the results of comparative advantage analysis and SWOT analysis show that in fact Indonesia has several factors that can be optimized in order to create a balanced trade cooperation with china. It is also indicated that Indonesia actually has a lot of strengths that can be used as pillars to optimize the benefits of the implementation of ACFTA, and the opportunities that can be taken from it.