Turkey, China set to revive Silk Road – Hurriyet Daily News and Economic Review

Turkey, China set to revive Silk Road

Turkish State Minister Zafer Çağlayan (R) and China’s Trade Minister Chen Deming during Friday's meeting in Istanbul. AA photo

Turkish State Minister Zafer Çağlayan (R) and China’s Trade Minister Chen Deming during Friday’s meeting in Istanbul. AA photo

Chinese companies are looking to take part in the upcoming infrastructure and energy projects in Turkey, China’s trade minister said Friday.

Chen Deming was visiting Turkey together with a delegation of representatives from some 70 major Chinese businesses with the purpose of strengthening trade ties with Turkey. During the visit, Chen and part of the delegation met with State Minister Zafer Çağlayan, Transport Minister Binali Yıldırım and Prime Minister Recep Tayyip Erdoğan on Thursday.

“We are here to strengthen trade ties with Turkey and make new contacts. With the prime minister, we discussed the rapidly growing trade between Turkey and China,” Chen said at the Turkey-China Trade, Economy and Investment Cooperation Forum. Between 1990 and 2008, trade between Turkey and China grew from $283 million to $14.8 billion.

“Chinese companies are particularly interested in taking part in the construction of a third bridge connecting Asia and Europe in Istanbul, the expansion of the city’s underground network as well as the upcoming energy projects in Turkey,” Chen added.

The need for investments in Turkey’s energy sector in the next 10 years is expected to reach $130 billion.

Balance in favor of China

Turkish-Chinese trade volume stood at $11.27 billion in the first 11 months of 2009, reflecting the evolution since the global crisis set in. At present, trade balance between the two countries is currently too much in China’s favor. Between January and November 2009, China imported items worth $10.08 billion to Turkey, while Turkey’s exports to China stood at a mere $1.18 billion. “We would like these figures to be more balanced. We are not here just after a higher trade balance in our favor,” Chen said.

During the visit, the representatives of major Chinese and Turkish companies signed 38 cooperation and trade agreements between themselves. The total volume of the agreements stands at $1.05 billion, the official Xinhua news agency said. The contracts include Chinese imports of minerals and marble, as well as construction of power plant projects in Turkey.

State Minister Çağlayan noted that China is mistakenly perceived solely as an export-oriented economy. Although it is has become the top exporter in the world, it is also a major importer, with a volume of $1.2 trillion. “In fact, we need to think why Turkey’s share of this $1.2 trillion is only $1.5 billion. Turkey is a country whose share of China’s imports should be more like $51.5 or $100 billion,” Çağlayan said.

Historical change in China

Turkey offers notable opportunities for Chinese firms due to the incentives for foreign investors and the Customs Union with European countries, Çağlayan added. “Chinese firms can find a company in Turkey and sell their products to Europe from here and thus enjoy the liberties of the Customs Union. Tax incentives offered to foreign investors are likely to be in place for one more year. So why make the road longer?” he asked.

Chen added that changes within Chinese society mean new potential for Turkish firms. “We are living through a historical change in China, with industrialization and urbanization. This means notable opportunities, for example, for the construction and building materials sectors. But Turkish companies must come to China more and get to know the country.”

Chi Changhai, vice chairman of the Chinese International Contractors Association, or Chinca, said Turkish and Chinese contractors were already involved in several joint projects, which highlight the potential for closer cooperation. “Examples of ongoing projects include a consortium in Albania, where Chinese and Turkish contractors have made a construction deal of about 2.1 billion euros. There is also a mining operation between Chinese and Turkish firms worth approximately $230 million,” he said.

Hüsnü Özyeğin, chairman of the Turkish-Chinese Business Council, said the experience of Turkish contractors in Iraq and Afghanistan proves their professionalism and stamina. “Our contractors are not put off by anything. When the Berlin Wall went down, it was Turkish construction firm Enka that went to Russia and built some of the country’s army barracks. In Iraq, Turkish construction firms even built the dining rooms of the U.S. military there. Turkish firms are also involved in many infrastructure projects in Afghanistan, like the Chinese,” Özyeğin said.

Posted via web from Jonathan Bowker

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