PREFACE

Praise to the Almighty Lord, Jesus Christ, for all His blessings and

guidance so that the writing process of this thesis, entitled “The Implementation

of ACFTA: Challenges and Opportunities for Indonesia Periode 2010-2012”, can

be completed well. This thesis consists the combination of knowledge and effort

and is made to attain Bachelor Degree in Social Sciences, Pelita Harapan

University, Karawaci.

The author realizes that without the guidance, support and prayer from

many people, this bachelor study and thesis would not have been completed.

Therefore, by this opportunity, the author would like to acknowledge, give the

highest respect and thank following:

1) Almighty Lord, Jesus Christ, for all His blessings and guidance in

finishing process on Thesis

2) Drs. Ignatius Ismanto, M.Si., as the supervisor of this thesis for his time,

patience, guidance, advice, support, and outstanding knowledge sharing

that very helpful so that this thesis could be well completed in timely

manner.

3) Prof. Aleksius Jemadu, Ph.D. as the Dean of Faculty of Social and

Political Sciences, Pelita Harapan University and inspiring lecturer.

4) Mr. Roy Vincentius Pratikno, B.Sc., M.M. as the Head of International

Relational Department for the enduring support, care and guidance during

the author’s undergraduate study.

5) Mr. Indra V. K., S.Sos, M. Asian St., Mr. Victor Silaen, M.A., Mr. Irman

Gumilang Lanti, Mr. Rully Mangunsong, Mr. Valentino Edy Hermawan,

Mr. Bhatara Ibnu Rheza, Mrs. Sylvia Maladi, Mr. Tobias Basuki, Mr Jerry

Sambuaga, and all lecturers that have supported and given valuable

knowledge throughout the three and a half year of the author’s

undergraduate study in International Relations Department, Pelita Harapan

University.

6) Mrs. Youshy Fahreiza, Mr. Andri Gilang Nugraha, Mr. Muhammad Yani

of Ministry of Trade Republic of Indonesia for the inputs during the

process of data collecting of this thesis.

7) Mrs. Fransisca Endah, Mr. Nalkukuh, Mrs. Helen Diana, Mrs. Esther

Taruli and all other staffs of FISIP UPH that have given administrational

support and help for the author during her study in UPH.

8) Cindy Cintasih, Gina Karina, Stella that have being so helpful and caring

this whole semester.

9) Beloved parents, Grandma, brother , for all the love, prayer, support, care,

and stand for the author no matter what in writing process of this thesis.

10) Hendro Hodianto for the unconditional love, prayer, support, and care in

the writing process of this thesis.

11) All best friends (Rina Regina, Rosalina Sariowan, Nita Fenina, Avrenita

Christina, Agnetha Valeria, Jessivia, Cindy, Pricilla Christy) and fellow

friends in International Relations batch 2009. Thank you for all support,

friendship, and kindness.

12) To all names that cannot be mentioned here one by one, thank you for the

guidance, help and support in the completion of this thesis.

The author acknowledges that this thesis still possesses many deficiencies and

not perfect. Therefore, critics, inputs, and suggestions from readers are

welcome and encouraged for further improvement in the future

Karawaci, 25 Febuary 2013

Jessica Widjaja

TABLE OF CONTENT

page COVER

STATEMENT OF THESIS ORIGINALITY

THESIS SUPERVISIOR APPROVAL

EXAMINATION BOARD APPROVAL

ABSTRACT……………………………………………………………………. v

PREFACE…………………………………………………………………….... vii

TABLE OF CONTENTS……………………………………………………... x

LIST OF FIGURES………………………………………………..................... xiii

LIST OF TABLES………………………………………………....................... xiv

LIST OF ABREVIATIONS………..………………………….......................... xv

LIST OF APPENDICIES……………………………………………............... xvi

CHAPTER I INTRODUCTION

1.1 Background…………………………………………........... 1

1.2 Research Question………………………………………… 10

1.3 Purpose…………………………………………………….. 10

1.4 Problem Limitation………………………………………… 11

1.5 Research Plan………………………………........................ 11

CHAPTER II ANALYTICAL FRAMEWORK

2.1 Literature Review……………………………...................... 14

2.2 Theories and Concepts…………………………….............. 22

2.2.1 Interdependence Theory……………............... 22

2.2.2 International Trade…………………………… 25

2.2.2.1.Export and Import................ 28

2.2.2.2 Balance of Trade………….. 29

2.2.3 Trade Liberalization……………...................... 30

2.2.3.1. Trade Creation and Trade Diversion… 31

2.2.4 Trade Agreement………………………….. 32

2.2.4.1 Multilateral Agreement ….. 33

2.2.4.2 Bilateral Agreement ……… 33

2.2.5 Diplomacy Theory…………………………... 34

2.2.5.1 Economic Diplomacy…….. 36

2.2.5.2 Bilateralism Diplomacy 37

2.2.6 Bargaining Power………………………… 37

2.2.7 Investment ………………………………. 38

2.2.7.1 Benefits from FDI …………… 39

2.2.8 Productivity- Efficiency and Effectiveness 40

CHAPTER III RESEARCH METHOD

3.1 Research Processes……………………………………………. 45

3.1.1 Research Introduction………….. 45

3.1.2 Determining Topics and Problem Formulation…………………………….

46

3.1.3 Determining Research Objectives 46

3.1.4 Library Research……………….. 46

3.1.5 Data Collection and Analysis……. 46

3.1.6 Conclusions and Recommendations 47

3.2 Sources of Data………………………………………………….. 47

3.3 Types of Research………………………………………………. 48

3.4 Technique and Analysis of Data ……………............................. 50

3.5 Systematic Writing …………………………………………….. 52

CHAPTER IV DATA AND ANALYSIS

4.1 China Economic Rise in Interdependence Era………………… 53

4.2 ASEAN-Free Trade Area. ……………………………… 66

4.3 Rational establishment of ACFTA……………………………… 81

4.4 Challenges and Opportunities for Indonesia in ACFTA Scheme 96

4.5 Bilateral trade relations between Indonesia and China in ACFTA 121

4.6 Results Of Bilateral Relations Between Indonesia And China 129

CHAPTER V CONCLUSION AND RECOMMENDATION

5.1 Conclusion……………………………….………………... 142

5.2 Recommendation……………………………….…………. 148

BIBLIOGRAPHY……………………………….……………………………... 151

APPENDICES

xiv

LIST OF TABLES

page Table 2.1 Diplomacy Approaches 35

Table 3.1 Type and Source of Data 48

Table 4.1.1 China GDP Per Capita 56

Table 4.3.1 Asean 6 and China 88

Table 4.3.2 Asean-China Export, 2003-2007 90

Table 4.3.3 Asean-China Import, 2003-2007 90

Table 4.3.4 Background of AFTA and ASEAN-China FTA 95

Table 4.4.1 Export Non-Migas Indonesia Based on Destination Country 101

Table 4.4.2 Indonesia GDP

106

Table 4.4.3 Eksport- import Indonesia to Other Countries 109

Table 4.4.4 Comparison of Indicator Indonesia China Year 2009 110

Table 4.4.5 China Investment 2006-2011 113

Table 4.5.1

Balance Of Trade Indonesia And China 2006-2011

122

Table 4.5.2

The Development Of Non-Oil Exports By Country Of Destination

124

Table 4.5.3

The Development Of Non-Oil Imports By Country Of Origin

124

Table 4.5.4 Main Export Commodities Indonesia To The Republic Of China And The World

125

Table 4.5.5

Export-Import China With Some country of ASEAN (Jan-Nov 2011)

126

Table 4.5.6 Main Export Commodities China to Indonesia and the World

127

Table 4.6.1

Indonesia-China Trade Balance 1981-2009

140

xiii

LIST OF FIGURES

page

Figure 2.2.1 Analytical Scheme 22

Figure 2.2 Productivity-Efficiency and Effectiveness 43

Figure 4.2.1 Main Regional FTA 68

Figure 4.2.2 Asean in Global Landscape 69

Figure 4.4.1 Indonesia in Asean Collective Towards Trade 118

v

LIST OF APPENDICES

Page Appendix A

Monitoring

List……………………………………………………………...

A-1

Proofread

Approval……………………………………………………….....

A-2

Proofreader’s Curriculum

Vitae……………………………………..............

A-

3

Appendix B

Interview Transcript with Mrs

Youshy……………………………………...

B-1

Interview Transcript with Mr Andri

Gilang……………………………........

B-2

Interview Transcript with Mr Muhammad Yani

………………………........

B-3

Appendix C

ACFTA, Peluang atau Ancaman?................................................................. C-1

Menghadapi ACFTA, Let’s Do Our Homework

…………………………...

C-2

ACFTA, Mengapa Harus Takut? …………………….…………………... C-3

Jakarta Globe, Analysis: Economic Diplomacy Key to Foregin

Policy….....

C-4

Stages Customs Tariff

Elimination………………………………………….

C-5

Development of the Customs Tariff reduction……………………………... C-6

Balance of Trade Indonesia with China Period 2007-2011………………... C-7

China GDP Per Capita……………………………………………………… C-8

vi

Top 20 - Realization of Non-Oil Exports and Imports from Indonesia to

China Period 2006-2011…………………………………………………..

C-9

Indonesia Export- Import Development…………………………………… C10

Agreement On Trade in Services of the Framework Agreement on

Comprehensive……………………………………………………………...

C-11

Economic Co-Operation between ASEAN and China……………………... C-12

Protocol to Amend the ASEAN-China Framework Agreement Bali,

Indonesia, 6 October 2003…………………………………………………

C-13

Agreement on Trade in Goods on the Framework Agreement on

Comprehensive Economic Co-operation between ASEAN and

China……..

C-14

Join Statement between the Republic of China and the Republic of

Indonesia Agreed to Strengthening Economic and Trade

Cooperation……..

C-15

The Government Indonesia and China Expanding and Deepening Bilateral

Economic and Trade

Cooperation…………………………………………...

Joint Declaration between Indonesia and China on Strategic Partnership…..

C-16

C-17

Appendix D

Curriculum

Vitae………………...……………………………......................

D-1