(Bloomberg) -- The U.S.-China trade war is beneficial to Indonesia as it could lead to a shift in production to other countries in the region, according to Vice-President Jusuf Kalla.

“Ongoing trade war is quite good,” Kalla said at a discussion on economic outlook in Jakarta on Tuesday.

His comments are in contrast to those from other Indonesian officials, who have warned of the negative spillover effects from higher U.S. tariffs on China, including the possibility of China dumping cheap products, like steel, in neighboring markets.

Southeast Asia is seen a potential beneficiary from the trade war, especially low-cost locations like Vietnam. Indonesia, with its restrictions on foreign investment and poor infrastructure, is less of a drawcard for businesses.

Indonesia’s trade deficit ballooned to a five-year high of $2.1 billion in November as imports continued to outpace exports. There are signs the U.S. and China may reach a deal to resolve the trade dispute that’s resulted in the two countries imposing tariffs on a combined $360 billion in each others’ imports.

--With assistance from Karlis Salna.

To contact the reporters on this story: Viriya Singgih in Jakarta at vsinggih@bloomberg.net;Eko Listiyorini in Jakarta at elistiyorini@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Thomas Kutty Abraham

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