The art of trade war: spurring investments in Indonesia amidst the US–China trade war

Hilda Yanuar Jong

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The US–China trade war creates significant opportunities for developing countries, as global manufacturers need to relocate their production facilities out of China to avoid future tariff hikes. However, Indonesia as the biggest economy in the ASEAN is not experiencing any substantial advantage relative to its neighbors, especially compared to Vietnam. While there is no clarity on how long the trade war will last, it is important for Indonesia to strategize quickly to capitalize the opportunities. This article addresses the question of how Indonesia should strategize through country comparison and analysis of two types of policy competition, namely, incentives-based (IBC) and rules-based competition (RBC). In the short-term, Indonesia should be more accommodating for investors of all sizes and maximize the trade-related investment assistance. In the longer term, Indonesia should prudently open up to trade, improve cooperation between investment and trade functions, and build a positive public mindset for free trade.

Keywords: FDI; free trade; Southeast Asia; strategy; trade war (search for similar items in EconPapers)
JEL-codes: L81 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2022-05-01
New Economics Papers: this item is included in nep-cna, nep-cwa, nep-int and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Global Journal of Emerging Market Economies, 1, May, 2022, 14(2), pp. 204 - 221. ISSN: 0974-9101

Downloads: (external link)
http://eprints.lse.ac.uk/114464/ Open access version. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:114464

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().