The influx of Chinese goods into the Indonesian market has posed severe challenges to the local manufacturing industry, with multiple factories laying off employees one after another, causing public anxiety about the employment situation. According to Indonesian media reports, textile industry giantsSri Rejeki Isman (Sritex) ceased operations in March this year due to business difficulties, resulting in the layoff of over 10000 employees, making it the largest private enterprise layoff since President Prabowo took office.

Previously, Yamaha, KFC, and false eyelash manufacturersDanbi and other companies have also reduced their scale, laying off thousands of employees in the past six months. According to statistics from the Indonesian Federation of Trade Unions, about 60 companies have carried out large-scale layoffs in the past two years, mainly in the textile industry, but industries such as automotive parts and electrical appliances have also been affected.

The President of the Indonesian Federation of Trade Unions, Ristadi, pointed out that local products are difficult to compete with imported Chinese goods in terms of price and quality, especially for low-income groups who tend to choose Chinese goods with high cost-effectiveness. go overThe actual import value of Chinese textiles in the past 20 years may be twice the official data. At the same time, the export performance of local Indonesian enterprises continues to be sluggish, and the weak demand in the international market has exacerbated the industry's difficulties.

There are different interpretations between Indonesian officials and academia regarding the causes of the wave of layoffs. Minister of Human Resources Yashili denies any appearanceThe wave of layoffs "and the claim that the number of employees in some companies has increased instead of decreased. Industry Minister Agus acknowledged that factory closures were caused by multiple factors, including shrinking exports, poor management, lagging technological upgrades, and weakened domestic consumer demand.

Monica, a researcher at the Southeast Asian Research Institute in Singapore, analyzed that laid-off workers are shifting towards self employment or gig economy, but these positions are mostly in the low-end service industry and cannot promote industrial upgrading.From 2022 to 2024, the number of formal employment layoffs in Indonesia has surged from 25000 to 78000, while the informal employment rate has increased by 2-3 percentage points during the same period. Although the unemployment rate has dropped from 5.23% to 4.91%, the problem of "hidden unemployment" has become prominent, and the shrinking middle class and increasing economic insecurity may affect long-term development.

The academic community generally calls for the government to strengthen education and skills training to assist the workforce in transitioning to high-end industries. Faced with internal and external pressures, how Indonesia balances market opening with local industry protection and enhances labor competitiveness will be the key to solving its current predicament.