Translating into Growth: Turkey banks on Belt and Road to boost trade

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By CGTN's Aixinjueluo Bei

Turkish President Recep Tayyip Erdogan will take part in the Belt and Road Forum later this month in Beijing. That comes two years after China and Turkey signed a memorandum of understanding as part of China's Belt and Road Initiative to increase trade and cooperation. ‍

China is Turkey's largest trading partner in Asia. Turkey’s trade deficit with China rose from 1.24 billion US dollars in 2000, to 22 billion US dollars in 2015.

Sabri Tunc Angili, the country's Consul General in Shanghai, says Turkey’s location makes it a good place for Chinese companies to do business.

“Investing in Turkey is not just investing in the Turkish market. The company investing in Turkey can reach out to Russia because Russia is our No. 1 trading partner. That company can also reach out to the Middle East and North Africa. And as a matter of fact, many multinational companies use Istanbul as their regional headquarters,” said Angili.

Jiang Jianqing, then Chairman of ICBC, announces the acquisition of 75.5 percent stake in Tekstilbank from Turkish GSD Holding in May, 2015. The purchase marked the first business institution operated by a Chinese bank in the country. /CFP Photo

Chinese banks are already building a presence in the country. The Industrial and Commercial Bank of China (ICBC) bought a Turkish bank in 2015 and now has over 70 branches in and around Turkey. The Bank of China has been authorized to open a branch in Turkey and plans to set up a branch in Istanbul soon.

“We think it's important because when a bank comes, it means that there's a long-term prospect for further development of economic cooperation. Sustainable financing is a must, so that would positively affect the investment plans of Chinese companies to invest in Turkey,” said Angili.

That’s also why the Turkish government would consider using the RMB and Turkish Lira in their bilateral cooperation with China.

The Turkish Garanti Bank has set up a Shanghai office, and is now discussing with some Chinese counterparts a cooperation contract that will benefit investors from both countries in terms of investing environment and risk assessment. The deal will be signed at the Belt and Road Forum for International Cooperation in May in Beijing.

“It is helping Turkey's economy to get more advanced machinery, equipment and also financial support. For China, it also increases the Chinese exports to Turkey and trade volume between the two countries,” said M. Noyan Rona, chief representative with Turkish Garanti Bank of Shanghai Office.