Indonesia's Widodo supports China-led investment bank

BEIJING (AFP) - Indonesian President Joko Widodo said on Thursday that his country is firmly behind a new China-backed regional investment bank and sees it playing a stabilising role.

"Indonesia supports the AIIB and hopes it can be a tool for financial stability," Widodo said in a joint appearance with Chinese President Xi Jinping after they held talks, referring to the Asian Infrastructure Investment Bank.

Britain, Germany, France and Italy are among Western countries expressing their intention to join the US$50 billion (S$68 billion) bank, despite scepticism about the institution in Washington, which leads the World Bank, and Japan, which leads the Asian Development Bank (ADB).

China, the world's second-largest economy, has moved to assuage worries it wants the AIIB to usurp the role of the established World Bank and ADB, citing Asia's growing need for infrastructure financing.

South Korea on Thursday became the latest country with close ties to the US to say it would seek membership in the bank.

Widodo also said that he hopes Indonesia and China can achieve a currency swap agreement, realise bilateral trade of US$150 billion by 2020 and expand tourist visits to 10 million next year.

"Indonesia hopes China will give ordinary passport holders visa-free access just like Indonesia has done for ordinary Chinese passport holders," he said.

"Upon realising this goal, we can both better experience our strategic partnership, in a more specific and practical way."

Widodo, who took office in October, was in Japan for a four-day state visit before arriving in China.

He has vowed to boost Indonesia's economic growth, which slipped to its slowest pace in five years in 2014, but needs extra investment to help with an ambitious programme of building new infrastructure.

Eight agreements signed between Chinese and Indonesian government agencies on Thursday included avoidance of double taxation, cooperation in the Jakarta high-speed railway project, and cooperation in aerospace as well as marine search and rescue.

None, however, involved private companies.

Xi, meanwhile, said China will urge more investment in the South-east Asian country.

Widodo also expanded his comments beyond bilateral ties.

"Today, we see there are many problems in the world that are caused when force is used to solve problems, for example Iraq, Syria and Libya," he said. "Indonesia hopes more countries can adhere to UN standards when resolving disputes."

Xi, for his part, said that the two countries have much in common.

"In regional and international matters, we have the same interests which makes us share the same responsibilities," he said.

Widodo also invited Xi to participate in activities next month commemorating the 60th anniversary of the Asian-African Conference.

Also known as the Bandung Conference for the Indonesian city in which it was held, the gathering was a significant development in forging a common identity among developing nations, many of which were just emerging from decades of foreign occupation and colonialism.