Indonesia’s import behavior in the international trade between Indonesia and China

Abstract

This study will analyze and reveal the various Import behavior of Indonesian Government toward Chinese goods. Import is used in this study as an independent variable with the following analysis of its behavior. Such independent variables as GDP, CPI, and inflation attempt to explain the behavior of import variable. The GDP, CPI, and inflation variables as the most competent and relevant are used to describe the import behavior in this study. In addition, CPI, GDP, and inflation variables represented income aggregate (GDP) and the dynamics of behavior changes in the income aggregate (CPI and Inflation)

ACFTA which involves Indonesia and China apparently did not directly impact trade relationship between Indonesia and China. This research shows that the Indonesia Import behavior toward goods from China is still relatively stable. So in general it can be concluded that the approach which is used in this stage shown GDP, CPI, and inflation are independent variables combination that absolutely can explain Imports.

When we try to do a more in-depth research with the ACFTA Effective period (2010-2015), and presenting research data in the quarterly form, it shows that GDP, CPI, and inflation have little chance to influence the Import. Despite they still remain dominant for explaining the import, but their dominance is no longer absolute, as it still leaves space for explanation anymore, i.e. more than a third of the available space to enter and explained by other variables.

The analysis illustrates that gradually the presence of ACFTA deal will give significant impact on the behavior of international trade carried out by Indonesia, which in this specific research on the international trade of Indonesia with China.