The Effect of CPO Export to China on Indonesia’s Economic Development

Abstract

Crude palm oil export activities from Indonesia to China has been a beneficial trade activity for the national economy. The development between two countries bilateral economy relations can be seen from China as Indonesia’s priority on CPO export destinations country. The researcher aim to understand the effect of CPO export to China on Indonesia’s economic development. We expect to contributes to the literature by providing a CPO export perspective in different research variable. The researcher uses secondary data from Indonesia statistical yearbook with 2012-2021 Indonesia GDP, CPO export value to China, inflation, middle rates, and CPO production volume as the sample data. We use multiple linear regression as the analysis technique to conduct the research. The researcher obtained the following results: (1) Our findings on the effect on CPO export value to China towards Indonesia economy development was significant. (2) The effect on CPO production towards Indonesia economy development was significant and positive, particularly after the increase of CPO production volume that increases a country’s income. (3) The effect on middle rates towards Indonesia economy development was significant and positive. (4) The effect on inflation towards Indonesia economy development was significant. (5) There is a positive simultaneously significant effect on CPO export value, production, middle rates, and inflation towards Indonesia economy development.