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Indonesia's presidential challenger wants a better China trade deal

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Indonesian presidential candidate Prabowo Subianto greeting supporters after submitting his nomination papers to the General Election Commission in Jakarta, Indonesia, on Friday, Aug. 10, 2018. He has vowed to "seek a better deal" in trade with China, making relations with Beijing a key issue ahead of an April election in Southeast Asia's biggest economy.

[JAKARTA] Indonesian presidential candidate Prabowo Subianto vowed to "seek a better deal" in trade with China, making relations with Beijing a key issue ahead of an April election in Southeast Asia's biggest economy.

Using a strategy that helped Donald Trump win the US presidency and brought Mahathir Mohamad to power in neighboring Malaysia, the former Indonesian general pledged to investigate trade with China and then push for bilateral talks. In the wake of Indonesia posting its worst-ever trade deficit, Mr Subianto, more commonly known as Prabowo, also sharpened his attack on President Joko Widodo's economic performance.

"Indonesia should review China trade policy with Indonesia and see where unfair trading policies are being used, such as producer subsidies and dumping," Irawan Ronodipuro, director of foreign affairs for the Prabowo campaign, said in a text message. "We must seek a better deal."

China's growing economic might has increasingly become a key election topic in Asia and around the globe, usually with opposition politicians railing against incumbents for deals that increase reliance on Beijing. Over the past several years, Sri Lanka, the Maldives and Malaysia have all seen pro-China administrations booted from office.

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China is Indonesia's biggest trading partner, with two-way trade jumping 25 per cent to US$66 billion in the first 11 months of last year, according to the Indonesian Ministry of Trade. China also enjoys a significant trade surplus with Indonesia, which surged almost 42 per cent to US$16 billion in the same period.

The election campaign - a re-run of the 2014 poll - has been dominated by economic issues including the cost of living and jobs. While Mr Widodo has been boosted by figures showing more than 10 million jobs were created since he took office, his government has been under pressure as 2018's rout in emerging markets saw the currency hit a two-decade low. The rupiah has recovered and is up more than 1.5 per cent this year.

The issue of China's sizeable trade surplus was raised in a meeting between Mr Widodo and Chinese President Xi Jinping in November, with the Indonesian leader appealing for Beijing to resist applying quota restrictions on Indonesian goods. Mr Widodo, however, has courted Chinese investment as well as billions of dollars in financing for infrastructure under the so-called Belt and Road Initiative.

For Mr Prabowo, who has already pledged to review Belt-and-Road projects including a high-speed railway, boosting exports is a priority. This would be done through trade deregulation and increasing credit facilities for exporters, while large foreign direct investors in export industries will be given incentives to locate to or expand their operations in Indonesia, Mr Ronodipuro said.

With three months to go until April's election, Mr Widodo continues to lead Mr Subianto in polls. A survey published by Charta Politika on Wednesday showed the incumbent with a 19-point lead, although another poll has shown the gap has narrowed since September.

Mr Widodo and Mr Subianto were set to face off on Thursday in the first of a series of election debates. Mr Widodo, known as Jokowi, will defend his track record on corruption, terrorism, law reform and human rights. Mr Subianto has proposed tax cuts for companies and individuals in a bid to revitalize Southeast Asia's largest economy.

Finance Minister Sri Mulyani Indrawati said she would take a closer look at the trade balance before coming up with measures. "I think the response won't be on a country basis," Ms Indrawati told reporters on Wednesday. "But if there is a particular country that stands out, we'll see what steps that can be taken by us," she said.

BLOOMBERG