DIGITAL SOVEREIGNTY IN INDONESIA-CHINA TRADE
RELATIONS
Ratih
Anggun Puspita1*, Athor Subroto2, Lili Yulyadi Arnakim3
School
of Global and Strategic Studies, Universitas Indonesia, Jakarta, Indonesia1,2
Departement
of International Relations, Universitas Bina Nusantara, Jakarta, Indonesia3
Email:
[email protected]*
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ARTICLE INFO |
ABSTRACT |
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Date received : December 17, 2022 Revision date : December 28, 2022 Date received : January 5, 2023 |
The bilateral
cooperation between Indonesia and China has been going on for a long time,
including cooperation in the trade sector. In 2019, the e-SKA data MoU was
signed as a basis for exchanging data between exporters and importers of the
two countries. The transformation of the certificate of origin into e-SKA is
one of the efforts to keep pace with the increasingly rapid development of
technology and digital. Thus, this digital development needs to be
accompanied by the readiness of the state to have a defense and security
system to maintain and realize digital sovereignty. This research was
analyzed with the theory of Competitive Intelligence. The method used is a
qualitative method with Content Analysis specifications. The results of this
study indicate that the trade relations between Indonesia and China as
trading partners, it always increasing, especially with the development of
the digital era as it is today. The implication of this research is to
provide knowledge for related parties about the importance of data
sovereignty, especially in trade relations between countries. |
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Keywords: Digital Sovereignty; Indonesia-China
Trade; Competitive Intelligence; e- SKA |
INTRODUCTION
According to data from the Indonesian Ministry
of Trade, with China, ASEAN, through free trade, created a new agreement on
November 4, 2002, called ACFTA or ASEAN-China Free Trade Area. From the
development of bilateral relations, Indonesia-China continues to increase
cooperation, one of which is exchanging data on certificates of origin in trade
(Saphira, 2019). The
rapid development of technology and information today has brought people to the
information revolution that gave birth to a new virtual world, the cyber world.
This development gave birth to ease, allowing users to exchange data and
information through cyber activities.
Cyber activity in this virtual space allows an
interaction to be carried out globally with characteristics without boundaries
of space (borderless) and time (timeless) (Yuniarti & Herawati, 2020).
E-SKA is one of the effects related to the growing era of digital
transformation today. In the cooperative relationship between Indonesia and
China, the main indicator of this cooperation is the exchange of electronic SKA
data. Data Electronic- Certificate of Origin (e-SKA) is a collection of data
from corporations, import-export companies, or MSMEs from Indonesia and China.
These data are sourced from the Ministry of Trade of each country. This data
also becomes very important for corporations and the ministry of commerce
because it is a state asset to run the country's economy.
The use of e-SKA as a standard mechanism in
trade activities between countries currently gives a strong message that data
issues are very sensitive and urgent to pay attention to. Especially in today's
digital era, practically making all living spaces undergo a digitization
process. The most important thing that can be done to overcome cyber risk is to
implement an early warning system or processes for the possibility of misusing
e-SKA data (Simarmata et al., 2020). In
addition, the possibility of data leakage or hacking can occur and be carried
out by hackers so that the data can be traded and can get big profits from the
sale of company data. More than that, the risk that will be faced when hackers
carry out hacking is that not only is e-SKA data hacked, but data related to
the state can also be hacked and used as a means of extortion against the
state. Because in today's digital transformation era, it is undeniable that the
mainstreaming of virtual (electronic) work patterns or schemes practically
utilizes data, regardless of whether the data is big data. The reasons
mentioned above then underlie this research to examine the implications of
E-SKA for our digital data sovereignty as something that must be protected.
Competitive Intelligence is knowledge and foreknowledge
about the overall business environment, resulting in actions or actions (Talaoui & Rabetino, 2017).
Competitive Intelligence is the ability to understand the interrelationship of
facts presented in such a way as to guide action towards a desired goal (Luhn, 1958). In
addition, another definition related to competitive Intelligence is that it is
a process that involves the collection, evaluation, processing, analysis, and
dissemination of economic data (about products, clients, competitors, etc.) as
a possible solution in knowledge management (Briciu et al., 2009).
Intelligence in the economic field is developing and becoming a trend in
today's business environment because competition and competition in the market
are increasing rapidly (Minelli et al., 2013).
Therefore, in this context, organizations need to become increasingly aware of
the importance of knowledge as a key factor in gaining a competitive advantage.
If knowledge refers to past or known knowledge,
Foreknowledge refers to the future, which includes: indications, predictions,
forecasts, and estimates, about what will or may happen. Competitive
Intelligence has become the art of collecting, processing and storing this vast
amount of information or data to make it transversally available to everyone in
the company, to help them shape its future and protect it against today's
competitive threats (Husni & Mukhlash, 2014; Rouach & Santi, 2001)
In international trade, particularly in Indonesia-China trade relations,
Competitive Intelligence can act as a 'signal 'for local companies and the
government to encourage increased competitiveness to face the ever-changing
business and investment climate (Miller, 2000). In
the following tables and graphs, the trade balance between Indonesia and China
can be seen:
|
Year |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
|
Export |
17.605,9 |
15.046,4 |
16.790,8 |
23.083,1 |
27.132,2 |
27.961,9 |
31.781,8 |
53.765,5 |
|
Import |
30.624,3 |
29.410,9 |
30.800,5 |
35.766,8 |
45.537,8 |
44.930,6 |
39.634,7 |
56.227,2 |
|
Indonesia-
China Trade Balance of Trade |
-13.018,4 |
-14.364,5 |
-14.009,7 |
-12.683,7 |
-18.405,6 |
-16.968,7 |
-7.852,9 |
-2.461,7 |
As attached, the table of Indonesia's trade
balance against China always showed a deficit figure. Until 2021, Indonesia
will still experience a trade balance deficit of -2.46 billion USD with an
export value of 53.76 billion USD and an import value of 56.22 billion USD.
Indonesia has always experienced a trade balance deficit with China since 2014.
The highest deficit occurred in 2018, which was 18.40 billion USD. The
condition of the trade balance deficit is a sign that a country imports more
than exports. This will certainly have an economic impact on a country because
trade can directly affect domestic production activities and demand for domestic
currency. If exports in a country increase, domestic product demand will also
increase, encouraging companies to increase production/ output. An increase in
production will certainly have an impact on the emergence of more jobs and an
increase in income in the domestic economy.
On the other hand, if a country is more
dominant in importing, it will reduce real domestic GDP. When imports increase,
it stimulates the production and job creation. An increase in income will occur
in trading partner countries (in this case, China), while Indonesia will
experience a decline in aspects of the domestic economy. Therefore, it can be
said that imports are leakages in an economy.
To avoid leakages, the concept of competitive
Intelligence can be applied. The increasingly fierce competition in the
business sector between the two countries should be able to make the government
policymakers and companies seize more opportunities while designing strategies
to deal with various kinds of challenges that occur today. External factors
strongly influence the business climate because uncertainty and inhibiting
factors originating from external factors cannot be predicted and anticipated.
It can trigger things that related parties do not desire. External factors
cover competitors and can include growing political, economic, social,
environmental, cultural and technological factors. With increasingly fierce
competition in the business world, coupled with complex, dynamic, and rapidly
changing external environmental conditions, the existence of competitive
Intelligence is an early warning for a country, as well as related business
entities, to be able to face these threats and challenges. As an early warning
system), competitive intelligence analysis will give countries and business entities
better competitive strategies than partner countries, which are also
competitors. Competitive Intelligence Analysis is research related to the
competitive intelligence gathering process used in understanding the direct or
indirect competition that affects an entity to find and take advantage of
opportunities to be developed. The role of competitive Intelligence in
increasing effectiveness within the entity is as follows (Mavrea et al., 2021):
1) Competitive Intelligence is needed as an early
warning system, prevention, and early handling of various threats that can
occur within the company related to competitors.
2) Competitive Intelligence can help business
organizations to develop scenarios from best to worst while preparing
strategies to prevent and deal with threats.
3) Monitoring competitors' actions so they can
form counter strategies within the company.
4) Measuring the effectiveness of Competitive
Intelligence related to asset building focused on developing new businesses,
saving costs, and calculating the potential impact on the financial aspect
between using It or not using it.
In competitive intelligence theory, the real
actors are corporations, exporters, and importers from each country. While the
state, in this case, the ministry of trade of each country, is only a tool of
competitive Intelligence. Digital trade data (trade data to electronic SKA) is
a set of indicators that influence the establishment of cooperation and is an
important factor in the theory of competitive Intelligence. The purpose or goal
of this collaboration is that the more data collected, the more powerful it
will be in finding loopholes for profit. Thus, if the Competitive Intelligence
analysis is carried out properly, the country is predicted to obtain high
economic growth compared to when an entity does not apply competitive
Intelligence in making decisions. An effective competitive intelligence process
can set the intelligence user as the starting point for all functions. Users of
competitive Intelligence will be given knowledge as a sign/signal that they
need to be analyzed to obtain expected economic growth and improvement.
Competitive Intelligence can provide analysis and recommendations that can
facilitate strategic decisions. Competitive Intelligence used properly will
provide enormous benefits to governments as well as business entities. Based on
the description above, there are several points of benefits of implementing
Competitive Intelligence in trade according to the researchers, such as:
1) Facilitate identification of opportunities and
challenges in trade.
2) Improve the entity's ability to face
competition in the global market and threats from other external aspects.
3) Improve market analysis capabilities.
4) As an early warning in terms of threats and
challenges in international trade
5) Improving the quality and effectiveness of both
strategic and tactical planning.
METHOD
A. Research
Paradigms
Research paradigms are how a researcher acts or
faces a problem in research and how researchers set experimental parameters (Guba & Lincoln, 1994).
This is the most fundamental way to overcome every problem in research. The
paradigm used in this research is the constructivist paradigm.
B. Data
Collection Techniques
In this study, researchers
used data collection techniques through interviews, literature studies and open
sources to obtain data and information related to the research (Creswell & Poth, 2016). The
author chooses the data collection technique. This is due to the dynamics and
developments of trade between the two countries which continue to experience
rapid changes. The analysis method used by the researcher is content analysis.
A. Indonesia-China
Trade Profile
The trade relationship between Indonesia and
China has been established for quite a long time. China and Indonesia are
important trading economic partners. The two countries' economies are
complementary, with industry and supply chains deeply integrated. Judging from
the history of the relationship between the two, economic cooperation has
distinct dynamics, especially in trade and investment. The economic cooperation
between the two countries only started to stabilize and then grew positively in
the 90s. This was then strengthened by the existence of a free trade agreement
between ASEAN and China (ACFTA) ratified by ASEAN in 2002 and Indonesia in
2014. ACFTA then became the basis for increasing trade relations between
Indonesia and China and continuing to grow (Siwi, 2013). The
implementation of ACFTA then brought about increasing trade relations. This can
be seen in the table presenting the total amount of trade related to the export
and import of non-oil and gas products between Indonesia and China below:
Table 2. Indonesia-China Non-Oil and Gas Trade (value in millions of
USD)
|
Year |
2017 |
2018 |
2019 |
2020 |
2021 |
Trend (%) |
|
Eksport Value |
21.349,7 |
24.408,1 |
25.894,3 |
29.936,4 |
51.088,9 |
23,29 |
|
Import Value |
35.511,8 |
43.883,7 |
44.038,1 |
39.123,6 |
54.800,7 |
32,57 |
|
Total Trade |
56.862 |
68.292 |
69.932 |
69.060 |
105.890 |
|
Source: https://satudata.kemendag.go.id/
The increase in Indonesia's trade relations
with China which is increasing every year, has changed China's position into a
country that ranks number one both as an export destination country and an
importing country of origin for Indonesia, shifting the position of the United
States and Japan. Based on table 2, it can be seen that the total number of
trades between the two has increased significantly. Between 2006 and 2010, it
was noted that the total amount of Indonesia's trade with China increased by
36.8 billion USD. Trade between the two continues to increase from 2017, with a
total trade of 56.8 billion USD in 2018 of 68.2 billion USD. In 2020, as we all
know, the Covid-19 pandemic occurred, and the trade value between the two
countries decreased slightly from USD 69.9 billion to USD 69 billion. After the
Covid-19 pandemic subsided, the total value of non-oil and gas trade between
Indonesia and China shot up quite high in 2021, which was 105.8 billion USD.
B. Digital
Sovereignty in Indonesia-China Trade Relations
The rapid development of the use of digital
technology lately, of course, also impacts the trade sector between countries,
especially Indonesia and China. The memorandum of understanding for the
exchange of the e-SKA data, which was agreed upon in 2019, is one of the
breakthroughs made by the Ministry of Trade of the Republic of Indonesia to
offset changes in data that metamorphoses digitally. These changes are
certainly needed to meet economic needs and emphasize national interests in
international trade as a sovereign nation. Regarding digital sovereignty in
Indonesia-China trade relations, researchers specifically classify it into two
aspects. First, from the aspect or nature of the data as something broad, it
includes things that transcend temporal and spatial boundaries. Second, from
the aspect of national defense, it includes the strategy and ability to protect
the state from the threat of sovereignty. Both aspects are based on
strengthening the building of regulations or agreements that support them. The
digital use of Certificate of Origin (SKA)
data as a new mechanism in trade activities between countries currently gives a
strong message that data issues are important to pay attention to. Especially
in today's digital era, it is undeniable that everything and all living spaces
are undergoing a digitalization process. In the e-SKA mechanism, companies
(importers and exporters) must include their complete identities online. Thus,
sourced from the e-SKA data uploaded on the provided site, company data is
collected, which can then be referred to as big data verified ministry of
Trade's. There are several examples of company lists that can be accessed
through the website www.trademap.org can be seen from the following table:
Table
3. List of Exporting Companies in Indonesia
List
of exporting companies in Indonesia for the following product
Product
category: Groceries and related products, etc
|
Company name |
Number
of product or service categories traded |
Number
of employees |
Turnover (USD) |
Country |
City |
|
ABHI MANGGALA SENTOSA, PT |
4 |
43 |
10.152.472 |
Indonesia |
Jakarta |
|
AGRO BINTANG SEJAHTERA, CV |
2 |
5 |
538.134 |
Indonesia |
West Java |
|
AR-RAYYAN AGROINDUSTRI, CV |
2 |
5 |
450.000 |
Indonesia |
Bandung |
|
BERINDO JAYA,
PT |
1 |
45 |
4.712.310 |
Indonesia |
Bandar Lampung |
|
BESTCO, PT |
3 |
15 |
800.000 |
Indonesia |
Tangerang |
|
BINTANG TERANG ABADI,
CV |
2 |
4 |
1.092.970 |
Indonesia |
North Sumatra |
|
BUDI WAHANA BINASWASTA, PT |
1 |
30 |
3.469.761 |
Indonesia |
South Jakarta |
Source: www.trademap.org
The table above is a collection of the list of
exporting companies in the Groceries and related products category, sourced
from the HS-17 code for the Sugars and sugar confectionery. In the description
of the table above, users of related sites can obtain information related to
the names of exporting companies, the number of categories of goods and
services traded, the number of employees, total turnover, and the country and
city of domicile of the company. In addition, users can click on the company
name to view the name of the owner or director, address and telephone number of
the company. In addition to the list of names of exporting companies, the site
can also display a list of importing companies, as shown in the following
table:
Table 4. List of Importing Companies in Indonesia
List of importing companies in Indonesia for the following product
Product category: Groceries and related products, etc
|
Company name |
Number of product or service categories traded |
Number of employees |
Turnover (USD) |
Country |
City |
|
IDS MARKETING INDONESIA, PT |
5 |
70 |
55.000.000 |
Indonesia |
Jakarta |
|
PT. BINTANG BAJA
SINAR CEMERLANG |
5 |
8 |
837.744 |
Indonesia |
South Jakarta |
|
Pt. Central
Proteina Prima Tbk - Cp Prima |
5 |
2041 |
486.592.180 |
Indonesia |
South Jakarta |
|
PT. DHARMA NIAGA |
6 |
900 |
94.246.200 |
Indonesia |
Jakarta |
|
PT. MARUBENI INDONESIA |
5 |
105 |
26.012.175 |
Indonesia |
South Jakarta |
|
PT. MENJANGAN SAKTI |
5 |
250 |
129.789.069 |
Indonesia |
East Jakarta |
|
PT. MENJANGAN SAKTI |
5 |
250 |
27.127.000 |
Indonesia |
Jakarta |
Source: www.trademap.org
In general, on the site www.trademap.org, all
users can see every trade between countries in detail. The site can be accessed
by anyone who wants to know about companies (exporters and importers) from all
over the world, complete with applicable tariffs. Regarding the digitization of
data related to the Indonesia-China trade, the nature or status of the data
should be debatable. The data set can be said to be big or not big data. At
least this is also a special concern for researchers. Some of the results of
interviews with certain parties regarding this matter can be stated as follows:
Tagara Primadista, Interview 2022, said that,
in fact, there is no big data scheme in the context of data exchange. Because
the scheme is not big, that is, what is exchanged in terms of data, it is
simple data, like a piece of paper. The number also does not reach millions.
So, it is not big. So, there is no need for processing using big data.
In addition, on different occasions, there are
different opinions regarding this matter, namely:
Viktor Tulus Sidabutar, Interview 2022, stated
that, in my opinion, it is big data. Because those numbers, when we transacted,
the name of the owner, what business the company is engaged in, the type of
work, it has written down, right? When it comes in, it will create it in the
database. First, name, origin, date of birth, a business about this, and so on.
All Indonesians who trade into China, China will make a cluster (ABCD). From
the cluster Then, they will see trends: the big entrepreneurs and the small
ones. From there, the commodities that are marketed will be known.
Each opinion regarding the nature or status of
the electronic SKA data gives us an idea that, whether as data or big data,
there are potential hacking threats and even threats to the sovereignty of our
digital data that can occur at any time. This is stated as follows:
Humphrey Russel, Interview crime cyber China
has one step ahead. China is more advanced than us. They steal our data almost
every day without us knowing, right? They tapped into the conversations of
Indonesians without us knowing. Thus, the development of digital data is like
two sides of a knife. One side can provide easy access to information and ease
of trade and investment processes that will impact the country's economic
growth. However, on the other hand, it can be a threat and vulnerability to the
leakage of important information that can threaten our digital sovereignty.
Of course, it is still fresh in memory when the
public was shocked by hacking important public documents to President Joko
Widodo's data by hackers Bjorka. In the context of e-SKA data exchange, it may
be different from the cybercrime case. However, it is not impossible.
Electronic SKA, a statement of 'citizenship' of an item, can be the target of
this digital crime. It is directly related to the issue of digital data
sovereignty as intended. Therefore, a system for anticipating, protecting and
preventing these threats is very much needed. Conversations and joint efforts
to maintain national sovereignty, including data sovereignty itself, are
necessary for today's digital transformation era. As illustrated in the
roadmap, it is explained that current state sovereignty is in the form of cyber
sovereignty (Yuniarti & Herawati, 2020).
Cyber sovereignty is the position that the state must have the power and
ability to regulate and supervise cyber traffic, both domestic and global, at
the gate of the country's cyber area (Sekar et al., 2016). To
maintain cyber sovereignty, it is necessary first to define the scope that must
be protected (territorial diversity of cyber areas).
Data sovereignty in cyberspace is an extension
of physical state sovereignty into absolute authority over the utilization of
infrastructure, entities, behaviour, and relevant data and information in its
territory, including independence and equality. Furthermore, it is necessary to
classify preventive and countermeasures and determine the necessary instruments
(Indonesian Telematics Society, 2015). perspective cyber security, in
establishing data sovereignty, Indonesia needs to focus on data confidentiality,
data integrity, data availability, namely through encryption, national email
services, and data centre localization), national routing on internet traffic,
and backbone national telecommunications network in the 2016-2045 ICT Roadmap
compiled by the Research and Development Agency for Human Resources and
Communication and Information, Indonesia's digital sovereignty is interpreted
in the form of state control over entity access and internet activities within
Indonesian territories. Therefore, the determination of Indonesia's cyber
territory (cyber territory) needs to be done to manage the configuration of the
broadband (broadband network) and build a barrier gate between broadband global
and national/domestic establishment cyber territory will immediately make the
state implement sovereignty through the establishment of a National Internet
Gate (Internet National Gateway), as a gateway for information in the cyber
territory Indonesia and the placement of data centres within the territory of
Indonesia. , In line with the principle of sovereign equality stated in the UN
charter, sovereign states have the right to participate in global governance in
cyberspace on an equal footing and jointly formulate international rules
(UNHAN, 2022).
Based on the description above, digital
sovereignty thus becomes a reason to look more practically and functionally at
the basic motivation for exchanging electronic SKA data. This is under the
following statement, namely:
Humphrey Russel, Interview 2022, stated that
research on e-SKA should be more related to trade because it has already been
discussed: who benefits? What did Indonesia get, and what did China get? How
much does the exporter get, and how much does the importer get? Maybe more to
the economic aspect. It is just that we are strengthening this aspect:
regulation. You must know that the country in the world that has a large enough
trade is China. China trades with almost all countries. Including Indonesia.
The American CSIS has data on China. One of them is the China Power Project
(CPP). CSIS makes all things China-related.
Regarding China's bilateral relations with
America, in terms of trade, security, etc. However, I want to say that whether
we agree or not, China is currently the second most powerful economy in the world
after America. Moreover, based on research results from several credible
international institutions, China will overtake the last position as a global
power world economy in 2028 or 2030.
CONCLUSION
This study concludes that under the ACFTA
agreement, trade relations between Indonesia and China as trading partners are
always increasing. The agreement has created free trade interactions between
Indonesia and China (bilateral free trade Indonesia-China), making it easier
for both countries to carry out export and import activities. Indonesia then
assesses this positive synergy in the economic sector of the two countries as a
form of benefit derived from Indonesia's trade relations with China. However,
the trade balance deficit challenges Indonesia's economic sovereignty. The
trade partnership built based on the agreement has not been able to make
Indonesia able to match China as an exporting country. In addition, other
problems then arise when digital transformation is growing rapidly. Data
digitization then threatens digital sovereignty in Indonesia's trade relations
with China. Like two sides of a knife, Indonesia faces not only the reality of
leakage in the economy due to its trade balance deficit and the threat of
digital data leakage in the context of international trade. However, this does
not mean Indonesia will lose a solution to this threat. Competitive
Intelligence can be applied to minimize the threats faced in trade relations
between Indonesia and China. As a system, competitive intelligence analysis can
be an early warning to maintain Indonesia's economic and digital sovereignty in
international trade.
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