(Repeats Tuesday's story, no change in text)
* China investment in Indonesia at record high
* Chinese companies prefer their own workers
* Jakarta election raises fears about anti-Chinese feeling
* Visa-free travel helps Chinese bring in workers-union
* Student vigilantes rounded up workers at Sulawesi smelters
By Eveline Danubrata and Gayatri Suroyo
JAKARTA, April 18 A bitterly fought election to
govern Indonesia's capital that has fanned religious tensions
has also thrown a spotlight on anti-foreign sentiment, as
conspiracy theories swirl about an influx of illegal Chinese
workers spurring vigilantism.
Foreign direct investment from China hit a record high of
$2.67 billion last year after President Joko Widodo rolled out
the red carpet to Chinese investors, who are typically willing
to take on risks for infrastructure and other big projects.
But the cheap funding comes at a price: Chinese companies
often bring in their own workers and machines, creating friction
with locals, according to interviews with labour groups, company
executives and government officials.
Indonesian investment chief Thomas Lembong said a "freak-out
over foreign workers" had been politicised, fuelling tensions
surrounding the Jakarta poll, which pits the ethnic Chinese
Christian incumbent Basuki Tjahaja Purnama against a Muslim
Purnama is backed by Widodo's ruling party and Lembong said
the issue of anti-foreign and - in particular anti-Chinese -
sentiment had been harnessed by rivals of the government.
"It's part of a broader effort to turn political sentiment
anti-foreigner and anti-Chinese at a time when Chinese
investment is poised to be the biggest factor driving the Asian
economy," Lembong told Reuters.
The number of Chinese work permit holders jumped 30 percent
in the past two years to 21,271 in 2016, the latest data from
Indonesia's manpower ministry showed. In comparison, there were
12,490 from Japan and 2,812 from the United States last year.
While the issue had been compounded by discredited reports
circulating on social media claiming that 10 million Chinese
workers had flooded Indonesia, labour unions still dispute
Chinese companies have been mis-using a visa-free route
meant for tourists to bring in "hundreds of thousands" of
low-skilled Chinese workers, said labour leader Said Iqbal.
Since February, the Confederation of Indonesian Workers'
Union (KSPI) has been compiling unofficial data on Chinese
workers suspected of not having proper documentation and it has
asked the manpower ministry to take action, he said.
"Local unskilled labour cannot work because the jobs have
been filled by the Chinese," the KSPI's Iqbal told Reuters.
Liky Sutikno, the Beijing-based chairman of the Indonesian
Chamber of Commerce in China, said some Chinese companies
temporarily bring in their own "technical workers", who would
return to China once the local teams take over.
These workers may have a better knowledge of products and
processes, on top of being faster in executing steps such as
installing machinery, Sutikno said.
Late last year, around 150 college students on Sulawesi
island, where several Chinese smelters are being built, stopped
vehicles they suspected of carrying illegal Chinese workers and
brought them to the authorities.
The group planned more raids this year, said Erik, one of
the students, who declined to give his full name.
Maruli Hasoloan, a manpower ministry official, acknowledged
some labour friction and vigilantism over the past few months.
While the ministry was coordinating with other authorities to
prevent any abuse of visa-free entry, it does not condone a
vigilante crackdown on foreign workers, he added.
Indonesia has suffered bouts of anti-Chinese and
anti-communist sentiment over its history, though this has
usually been directed at its minority ethnic Chinese community.
On average, Indonesian Chinese are far wealthier than other
ethnic groups. During riots leading to the fall of President
Suharto in May 1998, ethnic Chinese were targeted, making up
many of around 1,000 people who were killed in the violence.
Under Suharto, Chinese culture and language were severely
restricted, but at the same time he cultivated some ethnic
Chinese businessmen who became hugely rich.
The capital Jakarta has seen a series of mass rallies led by
hardline Islamists calling for Purnama, Jakarta's first
Christian and Chinese governor, to be jailed even as he was put
on trial over allegations that he had insulted the Koran.
Purnama, who is competing against former education minister
Anies Baswedan, denies what are regarded by critics as
While it is too soon to assess whether all this could have
an impact on Chinese investment decisions, some Chinese business
groups say they are worried about the uglier mood and also about
potentially losing a business-friendly leader of Jakarta.
Many Chinese companies favour Purnama for his perceived
ability to execute Widodo's infrastructure reform agenda, which
is aligned with Chinese President Xi Jinping's "One Belt, One
Road" policy to invest billions of dollars in global projects.
Jakarta, a city of more than 10 million people, accounts for
nearly a fifth of national economic output and is home to major
construction projects including a $5 billion Chinese-backed rail
connecting the capital to the West Java city of Bandung.
The anti-Purnama movement has also revived jitters about the
racial and religious under-currents in Indonesia, which has the
world's largest Muslim population.
"Chinese concern is stability and consistency of the rule of
law," Sutikno said. "What they are scared of the most is a
repeat of 1998, that the Chinese will be singled out again."
(Additional reporting by Agustinus Beo Da Costa, John Chalmers,
Fransiska Nangoy, Hidayat Setiaji and Wilda Asmarini; Editing by
Ed Davies and Bill Tarrant)