Chinese Textile Goods Hit Indonesia

Imports of textile goods and textile products (TPT) from China are reported to continue to surge in the domestic market. And suppress the growth of the textile industry in the country.

Chairperson of the Indonesian Filament Fiber and Yarn Association (APSyFi) Redma Gita Wirawasta revealed that one of the modes of entry for imported goods is to use import services which are now available on online shopping platforms. With this service, 'free' imported goods invade the domestic market, at lower prices.

Redma said, if the invasion of imported goods, especially from China, continues, Indonesia must be prepared for successive waves of layoffs (PHK).

"Right now, we can hear news of layoffs here and there. Many factories have collapsed. In the WA groups, friends are sharing photos of factories that have to close, have to lay off employees. Previously there were 500 layoffs in Karawang, then in Solo, also Pekalongan," said Redma, Thursday (6/7/2023).

"Every month someone reports layoffs or off production. That's what publishes, there are companies that don't publish if they lay off employees. Because he thinks it's not layoffs, only temporary. But salaries are cut," he said.

Meanwhile, he continued, the invasion of imports will continue to invade Indonesia. This is because countries such as China, Bangladesh, Vietnam, and India are reported to be experiencing excess stock.

"This rush of imports can continue, even predicted until 2024. If there is no handling from the government. Because China, India, Korea, Taiwan and Vietnam are overstock," he said.

"Garment imports will increase in number and can invade the Indonesian market and if left unchecked it will continue to increase until 2024. Apparel or garment growth is higher, even though cloth is indeed a larger volume. Indonesia will be increasingly flooded with imported garments. This is our main problem, said Redma.

Not only illegal imports, both new and used goods. However, legal imports that enter through the official door.

"These goods enter through the import service. You can open the link (on the online shopping platform). Those that offer official import services, wholesale import services, door to door import services, even to the state are guaranteed via the green line. If the red lane, the money is returned completely," said Redma.

"Imagine, if you import garments from China, 1 container is 20 tons. 1 kg is 5 pieces. And if he imports in bulk, I guarantee it won't be opened. Especially if it's a green line, it'll just go in, Customs won't dismantle it," he added.

As a result, he said, the imported goods floated into Indonesia.

Even worse, it will be sold in the domestic market at a very cheap price.

"Imagine, if 1 container could cost IDR 1.2 billion. With VAT and the safeguard tariff, the tax paid should have reached IDR 700-800 million. But, because it was wholesale, he didn't pay VAT and didn't pay safeguard tax, " he said.

"So only Rp. 200 million is paid in logs. The price for 1 container should include Rp. 2 billion in tax, so it is only Rp. 1.4 billion. It is sold domestically. The price is cheaper," he said.

Not to mention, continued Redma, because of overstock in their country of origin, manufacturers in China could sell at low prices. This means that it is no longer IDR 1.2 billion, for example.

"If it's for export, he (the producer) can get a rebate (cut), say 10%. So he just wants to sell cheap because he has excess goods there," said Redma.

"The government must act immediately. This should be a red light for the government. Especially with the current global conditions," Redma concluded.

Previously, the May 20023 edition of BCA's report on economic and industrial conditions noted that a wave of imports of textiles from China had hit the domestic industry. Where, there was an increase in imports of apparel by 24.7% in volume terms. Even though the value of losses is 36.6%.

In the report it was mentioned, 'clearing warehouse' factories in China will still occur.