Turkey targets exports, investments to redress 'asymmetric' China trade: deputy trade minister
Sim Sim Wissgott
Boosting value-added exports to China while attracting more investment at home: Turkey has big plans for its relations with China as it seeks to overcome a massive trade deficit.
In an interview with CGTN at the China International Import Expo (CIIE) in Shanghai, Turkey's Deputy Trade Minister Gonca Yilmaz Batur welcomed the long-standing relationship with China, its third largest trade partner globally.
"But it's very asymmetric, it's unbalanced... and this is not sustainable," she said.
In 2018, Turkey's trade volume with China topped 23.6 million U.S. dollars. But exports made up just 2.91 million U.S. dollars, while imports stood at 20.71 million U.S. dollars, leaving a trade deficit of 17.8 million U.S. dollars.
"When we look at the exports from Turkey to China, most of them are marble, metals and mining products, which are low-value-added products. But when I look at the imports from China to Turkey, then the products in question are mobile phones, technology instruments, consumer products, machinery equipment, these are value-added products," said Yilmaz Batur.
"If we can create an environment for both countries to use their value-added resources, value-added production to help each other to improve their internal business, then it is, I think, the future we should be looking at," she said.
Ankara is now hoping to boost its trade volume with China to 50 billion U.S. dollars, "but we also expect that 50 billion dollars to be equal for both parties, so investments from China are also a crucial component."
China invests over 100 billion U.S. dollars per year around the world but its total investment in Turkey over the past 20 years has been "not more than 4.3 billion dollars." "So this amount is really very little, very small when compared to the potential we have," said Yilmaz Batur.
Already companies like Alibaba, Chinese bank ICBC and telecom giant ZTE have poured funds into Turkey. ICBC acquired Tekstilbank in 2015, renaming it ICBC Turkey, while Alibaba bought a stake in Turkish e-commerce platform Trendyol last year.
Major telecom firms like Huawei and ZTE are not just selling but developing products in Turkey, with Huawei running an R&D center there and employing some 500 people.
Other sectors that would welcome investment include the energy, automotive and petrochemicals industries, said Yilmaz Batur.
Relationships tend to be "more sustainable and stronger" if countries have co-investment structures, she noted. "And Turkey... is a very strong investment candidate, with its rule-based structure, regulations, its proximity to very important regions," she said. "These are all good investment potential indicators."
Preparing to meet with CEOs from about 20 Chinese companies at the CIIE, the deputy minister said she hoped these would be "door-openers for investment in Turkey."
Crossroads between East and West
One of Turkey's key assets is its location, on the border between Europe and Asia and with easy access to Central Asia and the Middle East: More than 40 countries are within a three-hour-flight distance, said Yilmaz Batur. Along with "strong production quality, proven technologies, (and) long-lasting relations" in the region, "these are all advantages of Turkey which can be translated, transferred, into improving trade."
Inevitably, this also means Turkey plays a crucial role in China's Belt and Road Initiative.
Ankara has been developing its own "Middle Corridor" project, linking China to Europe via Central Asia and providing a much shorter route than the Trans-Siberian Corridor via Russia. Eventually, the plan is to integrate it with the Belt and Road.
"With the Middle Corridor, it will be possible to speed up the transfer process by seven or eight days for some specific products. And this is an important potential, not only for China, sending its products to Europe, but also all countries on the road will be affected positively from that initiative," said Yilmaz Batur.
Trade and people
While trade remains at the heart of the CIIE — Turkish companies cover about 1,500 square meters at this year's Expo — the deputy minister also rejoiced at seeing a steady stream of visitors come to Turkey's booth in the country pavilion, curious to learn more about her country.
"We need to improve the trade, we need to improve the relations," she said. But also, "we need to improve our people's awareness of each other's countries. Because when people know each other, when people know people, then it has a direct impact on the culture transfer, on trade, on economic relations."