China's President pledges to boost ties with Indonesia

China's President pledges to boost ties with Indonesia

President Xi Jinping pledged on Wednesday to set up an Asian investment bank to help facilitate regional connectivity as he visited the Southeast Asian region.

The bank will provide capital support to infrastructure construction in regional developing countries, including Association of Southeast Asian Nations countries, Xi said.

It is the first time that China has proposed such an Asian investment bank to aid regional connectivity.

The bank will collaborate with the existing multilateral development banks within or outside the region, complementing each other and ensuring the sustained stability of development of the Asian economy, Xi said.

"Boosting connectivity is now a necessary step for China and the Southeast Asian Nations to deepen their cooperation, and relevant projects are in desperate need of funding from such an investment bank," said Zhang Yunling, a senior research fellow of Asia-Pacific studies at the Chinese Academy of Social Sciences.

The meeting between Xi and his Indonesian counterpart Susilo Bambang Yudhoyono on Wednesday afternoon saw them ink a trade plan for the next five years and also agree to upgrade their bilateral cooperation to the level of a comprehensive strategic partnership.

"We have once again made history by agreeing to forge a comprehensive strategic partnership," Yudhoyono said after the presidential talks.

Currency swap deal

Among cooperation agreements inked on fisheries, aerospace and defence, the two countries also announced a 100 billion RMB-Rupiah currency (S$20.3 billion) swap deal on Wednesday to fend off financial instability due to the fragility of developed economies.

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