By Xi Laiwang
“I have been living in this small fishing village for 40 years, and over the past three years since Chinese enterprises began investing here, I have witnessed dramatic changes taking place that we never would have imagined in previous decades!” exclaimed Basri, a local villager.
Indeed, in just three short years, the Tsingshan Industrial Park, as part of the China-Indonesia Economic and Trade Cooperation Zone, has turned a remote fishing village nestled in the county of Morowali in Central Sulawesi, Indonesia, into a global base for ferronickel and stainless steel industries. Locals have seen tangible benefits from the industrial park, with their incomes soaring as they enjoy increased access to jobs.
Significant Economic and Social Effects
In October 2013, Chinese President Xi Jinping and the then Indonesian President Susilo Bambang Yudhoyono were both in attendance at the agreement signing ceremony in Jakarta, Indonesia’s capital, for the construction of the China-Indonesia Economic and Trade Cooperation Zone and the entry of the first project in the Tsingshan Industrial Park. Three years later, the industrial park has been designated a “Chinese Overseas Cooperation Zone” by China’s Ministry of Commerce and Ministry of Finance, after Indonesia’s Ministry of Industry honored it with an “Outstanding Industrial Park Award” in 2015.
So far, six enterprises have began construction at the industrial park, registering a total investment of US$4 billion. Two of them have begun operation, generating US$100 million in export value per month. The other four are scheduled to be completed and start production by the third quarter next year, with an annual sales volume (export value) expected to reach US$3.5 billion. Additionally, another three enterprises have signed contracts with the park, and construction will kick off around the end of this year.
On May 29, 2015, Indonesian President Joko Widodo personally announced the launch of the first project on the site of the industrial park. According to plans, by the middle of next year, an industrial chain from nickel mining to stainless steel hot rolling will be established here to produce 2 million tons of hot-rolled stainless steel coil annually, which will make the park the global largest stainless steel production base outside of China, creating at least 20,000 direct jobs and tens of thousands of indirect jobs for Indonesia.
The Governor of Morowali said with excitement that thanks to the Tsingshan Industrial Park and the stationed Chinese enterprises, his county saw GDP growth of 15 percent last year, three times the national average.
Sound Investment Environment
A park worker named Aulia revealed that her newly-wed co-workers take pride in using photos of themselves in their work uniforms as their wedding invitation cover photos. It is estimated that 10,000 local people currently work at Tsingshan.
Indonesia has a complete and strict set of laws and regulations on labor remuneration. Placing a premium on labor relations and respecting local laws and customs, the industrial park’s administrators implement the “equal pay for equal work” principle for performance appraisal, while also reducing tensions and easing conflicts at a timely manner, trying to create a sound environment for the development of the enterprises.
Since its establishment, the industrial park has attached great importance to environmental protection and ecological conservation. To prevent soil erosion, the park requires that all the water mixed with red soil as a result of strip mining must undergo three rounds of sedimentation before entering rivers and sea, and that all the opencast mines must be filled, leveled up and afforested. These days, visitors to the site never see red water near the estuaries and forests now carpet the outcast mines, which forms a contrast with most other nickel mines across Indonesia, winning Tsingshan a positive reputation.
Without four distinct seasons, the beautiful Sulawesi Island only has a dry season and a rainy season. During the dry season, due to limited rainfall, dust flies in the air, and the industrial park’s firemen reduce dust by splashing water on commonly used roads within the park.
Sharing Benefits
Asriah is a cleaner at Tsingshan, and her husband works as a driver at a factory there. With a monthly income of 6 million Indonesian Rupiah (US$460), the couple has recently built a brick house of their own.
“Thanks to the industrial park, we now have stable jobs and decent incomes, and have moved into our new home,” Asriah said.
“Thanks to the industrial park, we now have stable jobs and decent incomes, and have moved into our new home,” Asriah said. “Tsingshan has also provided electricity access to my village, so now we can watch TV at home after work.”
The park’s administrators place a high degree of importance on respecting local religious beliefs and cultural traditions. When the park first opened, all documents, slogans and official notices issued by administrators were printed in Indonesian only. Even after the park construction was in full swing and a great number of Chinese technicians and construction workers arrived, administrators still required that all reports submitted to Indonesian governments and non-governmental organizations at all levels be translated into Indonesian.
The industrial park also provides free basic medical care and first-aid services for villagers living in nearby areas, which benefited a total of 15,169 locals from 2011 to June 2015. Through the efforts of establishing scholarships (which has benefited 149 students since its launch in early 2015), reconstructing school buildings and inviting education experts from East Java to instruct local teachers, Tsingshan has played a contributing role in the development of local education.
The park’s measures to help non-local employees rent apartments nearby have brought additional income to surrounding villages, which, as they prosper, have taken on new looks and have become friendly neighbors of the park.
Just as Ibrahim Yusuf, chairman of the Indonesian Council on World Affairs, pointed out, China’s increased investment in recent years has greatly helped overhaul Indonesia’s backward infrastructure and low level of industrialization, and the Tsingshan Industrial Park remains a vivid example of the positive effects of cooperation between the two countries. Yusuf said he believes that the China-Indonesia cooperation under the Belt and Road Initiative and the framework of Indonesia’s Strategy of the Global Maritime Fulcrum will undoubtedly herald an even brighter future of bilateral relations.
China Report ASEAN 