Reorientasi Kebijakan UMKM di Era Asia China Free Trade Area (ACFTA)

Abstract

Most of Small Medium Enterprises (SMEs) worried after government implementing the Asia China Free Trade Area (ACFTA). This agreement pushed down the import tariff from five percent to zero percent. China’s products and local product compete in market without government protection. China’s products will dominate market share due to the lowness of local products competitiveness. In several years, deindustrialization potentially happens in Indonesia. Government should reorient the SMEs development policy to minimize negative impact of ACFTA. It can be done by supporting local potential commodities, revitalizing capital loan policy, and synergy between government and others stakeholders to develop SMEs.