China's Commerce Minister Chen Deming, in a meeting with Indonesian Trade Minister Mari Pangestu, announced China will lend at least US$1.8 billion to Indonesia in the form of soft loans. This will come as a part of its free trade agreement with ASEAN.
Additionally, China will also provide 1.8 billion yuan towards infrastructure related projects in Indonesia. The Export-Import Bank of China will provide a US$100 million in loans to companies investing in both countries, while the Industrial and Commercial Bank of China may lend US$250 million, said Ms. Pangestu.
Indonesia had been skeptical about the China-ASEAN agreement, as it was worried that the domestic market would be flooded with cheap Chinese imports and will lead to loss of jobs. The China-ASEAN free trade agreement came into effect in January, imposing zero-tariff rules on a wide range of goods.
China to lend Indonesia US$1.8b for infrastructure projects [Business Times, 5 April 2010]
China lends Indonesia US$2b [Straits Times, 3 April 2010]