Turkey and China Wednesday announced a goal to boost bilateral trade from the current $24 billion to $100 billion over the next eight years as senior government officials from two of the world's fastest growing economies met in İstanbul to discuss measures to facilitate trade.
One of the largest buyers of Chinese products, Turkey has long complained about an imbalance in bilateral trade, seeking ways to attract as much foreign direct investment (FDI) from the Asian country as possible. Turkish ministers did not hesitate to use Wednesday's Turkey-China Business Forum, which brought 200 Chinese businessmen together with their Turkish counterparts, as an opportunity to reiterate calls for increased efforts to minimize a widening trade deficit with China.
Pressure on China to this end is on the rise as Turkey is not the only country complaining about Chinese products swamping their markets. Chinese firms were accompanying China's leader-in-waiting Xi Jinping, who arrived on Tuesday in Ankara to meet President Abdullah Gül as part of a two-day visit.
Delivering a speech at Wednesday's meeting Turkish Economy Minister Zafer Çağlayan said the government was not happy with the current trade imbalance with China, adding new Chinese investments in Turkey would help remedy the situation. Çağlayan complained that Chinese investments in Turkey are below the desired level, underlying which he cited a lack of good information about the trade opportunities Turkey offers. “We must increase the number and scale of such mutual business forums and trade fairs to better understand each other,” he added. Çağlayan announced that Prime Minister Recep Tayyip Erdoğan planned a visit to Beijing in April and he said this visit could be an opportunity to cement trade ties for the future.
Turkish and Chinese businesses signed deals worth $1.38 billion in 28 separate deals during Wednesday's forum. Çağlayan said $500 million of the deals would concern Turkish exports to China, $570 million financial support of Chinese firms to Turkey and $308.5 million in a package of contractor and energy investments. Wednesday's meeting was followed by a series of accords signed between the two countries Tuesday in Ankara. Among them were a three-year currency swap deal between the central banks of Turkey and China, enabling the use of local currency in bilateral trade.
Speaking at the forum, Xi said the two countries, which are located at opposite ends of the Asian continent, could use their high-growth potential to boost cooperation within the region. “Our economies are not competing, but they are complementary each other. … We should see this potential and work accordingly for joint projects on both sides as well as in third countries,” Xi explained. Acknowledging that mutual investments did not reflect the real potential that exists between the two countries, Xi said the Chinese government encouraged entrepreneurs to this end. “The value of deals Chinese companies have signed in Turkey in the past decade reached $10 billion with projects worth $4 billion already finalized,” he noted.
Noting that Chinese companies were particularly interested in infrastructure and transportation projects in Turkey, Çağlayan said the multi-billion dollar Kanal İstanbul -- a canal linking the Black Sea and the Marmara Sea -- and a third bridge project over İstanbul's Bosporus were some that attracted Chinese investors' interest.
Late on Tuesday Xi proceeded to İstanbul where he met Erdoğan, who is recovering from surgery; İstanbul was his final station in his week-long tour. Observers argued Xi's Turkey visit following the US and Ireland was a clear indicator of the importance China's new leadership attaches to Ankara, which is boosting its influence in the political arena as well. Xi is almost certain to become the new Chinese president for the next 10 years in October.
‘China could build nuclear plant in Turkey’
Aspiring to minimize its dependency on foreign energy resources, Turkey has set construction of nuclear power plants as one of its top priorities. The country expects to have three plants by the year 2023. China remains a strong candidate for Turkey to cooperate with in this respect, government officials earlier said.
Speaking to reporters following the meeting Deputy Prime Minister Ali Babacan said the Turkish government sought ways to see Chinese firms support Turkey in its nuke bid. Turkey expects its first nuclear power plant to be built by a Russian firm, while it has already communicated with Japan and South Korea for the construction of two others. Babacan also said the government would like to see Turkish banks open branches in China and that Chinese finance institutions should feel free to enter Turkey.
Representatives from the Turkish business world who participated in Wednesday's meeting are as excited as government officials with regard to boosting trade with China. Turkish Confederation of Businessmen and Industrialists (TUSKON) President Rızanur Meral told Today's Zaman that the confederation was working to diversify products sold to China. Also speaking to Today's Zaman, Turkish-Chinese Industrialists and Businessmen Association (TÜÇSİAD) head Murat Sungurlu said only 43 of the 29,144 foreign-owned firms in Turkey were from China and that this number should be increased through mutual efforts. Turkish Exporters' Assembly President (TİM) Mehmet Büyükekşi said he has faith new Chinese investments in Turkey will help minimize the trade deficit for this country.
National flag carrier Turkish Airlines (THY) General Manager Temel Kotil told Today's Zaman that the carrier expected to fly to five new destinations in China and have conveyed this request to Chinese officials. THY currently flies to Beijing, Shanghai and Guanzhou.
The head of the Delegation of Turkey to the OSCE PA MP Emin Önen told Today's Zaman that the number of tourists from China to Turkey could be increased to 1 million a year from 100,000 in the middle term provided an effective promotion is conducted in China. “We are celebrating this year as ‘the year of China in Turkey, and China announced 2013 as the year of Turkey. We should use this opportunity,” he noted.
Turkish Hattat Holding CEO Mehmet Hattat told Today's Zaman that they expected to establish a fossil fuel plant worth $1 billion in Turkey's Black Sea jointly with a Chinese partner. Hattat said the facility is planned to be finalized within the next four years with an annual electricity generation capacity of 4,000 megawatts in the mid term.
Statistics show around 60 percent of Turkey's sales to China come from mining. Murat Akyüz told Today's Zaman they expected Chinese companies to switch to processing mining products inside Turkey rather than importing the raw material. “We are ready to engage in joint ventures with the Chinese, and this will be for the benefit of Turkish chemical markets where there is significant growth potential.”
Besides many state-owned companies, some entrepreneurs from local Chinese firms also attended this forum to explore business opportunities. One Chinese businessman, Chen Chi, said he was very interested in importing magnesium and other minerals from Turkey.
Zhao Xiaobin from Huawei Technologies Ltd. told Today's Zaman that Huawei chose İstanbul as the site for headquarters to manage its whole Central Asia business. “Turkey has an important geographical location and booming economics. I am very optimistic about our business,” Zhao said. “We cooperated closely with local academic institutes to set up research projects. By now, more than 700 Turkish researchers are working at Huawei's technology department.”
The president of the Export-Import Bank of China told Today's Zaman that a $700 million deal was signed with Turkey's Global Investment Holding. “The $700 million loan agreement of export buyer credit will be used by Turkey's Global Investment Holding to buy four bulk carriers from China's AVIC Weihai Shipyard. Directors from the China National Chemical Fiber Corporation said they would import $225 million of acrylic fiber and carbon fiber from Turkey in 2012. Representatives from China General Technology Holding Ltd. said their company was engaged in the Ankara-Istanbul high speed railway project by providing financial supports and machinery products.
Gina Ding, client relationship manager from the Yingke law firm, said their company was cooperating with Turkish lawyers to provide consultancy services to Chinese companies who wanted to directly invest in Turkey.