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Turkey's Business Leaders and Academics Welcome Belt and Road Plan

Despite concerns over the continuing trade imbalance between Turkey and China, the Turkish business community has given a cautious welcome to the Chinese blueprint for streamlining 21st century trade and boosting market access.

Photo: The Silk Road: Will latest initiative restore Turkey’s role as the link between Asia and Euro
The Silk Road: Will latest initiative restore Turkey's role as the link between Asia and Europe?
Photo: The Silk Road: Will latest initiative restore Turkey’s role as the link between Asia and Euro
The Silk Road: Will latest initiative restore Turkey's role as the link between Asia and Europe?

Turkey is one of the key stopping-off points along the Belt, and Road Initiative, China's ambitious plan to upgrade the world's trading routes and streamline access to many of the key global markets. The foundations for Turkey's involvement in the scheme were laid as long ago as 2010, with the signing of The Framework Agreement on Further Expanding and Deepening Bilateral Trade and Economic Co-operation Between Turkey and China.

This agreement was designed to facilitate the development of high value building and infrastructure projects for public utilities, telecommunications companies, railways, energy companies, airports, ports and Turkey's highways network. It was also geared to boosting Sino-Turkish trade, then worth around US$28 billion a year, to 50 billion by 2015 and 100 billion by 2020.

With the Belt and Road Initiative seen as the logical progression of this earlier undertaking, a number of Turkish businessmen and academics have cautiously welcomed China's plans. There are, however, several reservations and concerns on the part of the Turkish contingent.

Photo: Çolakoğlu: “High expectations.”
Çolakoğlu: "High expectations."
Photo: Çolakoğlu: “High expectations.”
Çolakoğlu: "High expectations."

Professor Selçuk Çolakoğlu
Professor of International Relations at Yildirim Beyazit University in Ankara and an advisor for the Center for Strategic Research, under the jurisdiction of Turkey's Ministry of Foreign Affairs.

Since the collapse of the Soviet Union, there have been a number of Silk Road-type projects. In the main, they have suffered from a lack of political will and a shortage of genuine financial support.

The Belt and Road initiative, however, seems to carry with it a presidential eagerness, while also being backed by sizable financial resources. To date, though, the two countries do not appear to have fully realised the potential of the 2010 agreement.

Back then, there was talk, for example, of a high-speed rail project. This has yet to materialise. When the 2010 agreement was signed, expectations were very high. Progress, however, has been slow.

In terms of bilateral trade, there is now something of a problem – a trade deficit highly in favour of China. As a result, Turkey wants to see some balancing factors. In particular, it wants to see more Chinese foreign development investment in Turkey. It wants to see China sponsoring some big projects.

Photo: Cottrell: “Very long road.”
Cottrell: "Very long road."
Photo: Cottrell: “Very long road.”
Cottrell: "Very long road."

There is enormous potential for this. An improved transport infrastructure would open up markets for Turkish businesses in Central Asia, Pakistan, Afghanistan and China itself, benefitting both countries. There is a need to see more concrete projects, however. If Chinese investment is secured, Turkey will clearly be a key transportation hub.

J Melvin Cottrell
An Istanbul-based business consultant and former Vice-chairman of the British Chamber of Commerce of Turkey with a 35-year history of working in the country.

Rebuilding the Silk Road is a catchy idea. It will appeal to Turks, many of whom take pride in the fact that their language can be spoken all the way to the Chinese border.

There will, however, be difficulties in fully implementing the strategy. China clearly has to keep its businesses happy by finding and developing new markets, but this is a very long road and the Chinese may find there are ways of accessing the Middle Eastern markets that are quicker and more practical.

Photo: Atli: “Historic role.”
Atli: "Historic role."
Photo: Atli: “Historic role.”
Atli: "Historic role."

Dr Altay Atli
Lecturer at Boğazici University and an expert in Sino-Turkish trade relations.

We need to look beyond the trade deficit with China and we need to address the many misconceptions about Chinese products. There is a general feeling in Turkey that goods from China are of a low quality and can be dangerous. Chinese manufacturing techniques, however, are changing fast.

Turkey is reliant on imported technology and China can clearly provide much of that. The entire world, for example, now uses Chinese railroad technology. If some of the proposed transportation projects come to fruition, this will also help Turkey once again fulfil its historical role as the link between Europe and Asia.

One temporary obstacle is that the Chinese and Turkish governments are at odds over China's treatment of the Uyghurs [a primarily Moslem grouping living in China's Xinjiang Uyghur Autonomous Region]. The two parties, however, are in constructive dialogue and my feeling is that the issue will soon be resolved and we can move on. After all, one of the chief beneficiaries of the Belt and Road will be the Uyghur region.

Make no mistake the Chinese very much want this initiative to succeed. China's growth is not only slowing down, its whole business model is changing and is in transition. As a result, it needs to improve the development of its Western regions.

For Turkey, improved transport links will boost its production of oil and gas. They will also prove a boon to those sectors – notably tourism and education where the trade imbalance is overwhelmingly in Turkey's favour. Closer links between the two countries will only enhance these valuable business opportunities.

This year, Turkey is chair of the G20 and next year it is China's turn. I hope and expect that their respective roles will only bring the two countries ever closer together.

Photo: Saylik: “Adding to prosperity.”
Saylik: "Adding to prosperity."
Photo: Saylik: “Adding to prosperity.”
Saylik: "Adding to prosperity."

Sayhin Saylik
General Manager of Kirpart, an automotive parts company with operations in China.

Of course the Belt and Road concept is a good idea and it should also work. It will not be easy, however, and it will take more time than people think before it is running efficiently.

When it is realised, in some form, I believe this will definitely add to the prosperity of both Turkey and China. Turkey's cultural and historical connection with the Silk Road and its role as the intersection of Europe and Asia place it in an extremely important position within the programme.

Over the last few years, politicians from both countries have underlined the flourishing economic and trade ties between Turkey and China. These have also been highlighted by a number of new projects, notably the establishment of the Silk Road Economic Belt, which will provide for the facilitation of investment and trade along the route.

China and Turkey already have extensive co-operation in a number of areas, such as high-speed rail, electricity generation, aerospace and satellites. Turkey has also become an important overseas engineering, procurement and construction market for Chinese enterprises. The establishment of the Silk Road Economic Belt will further broaden the scope of co-operation between the two countries when it comes to developing infrastructure projects.

Regardless of the Belt and Road, however, the trade deficit between Turkey and China has to be addressed. Apart from that, I have no real concerns about the programme. I believe this will create new areas for co-operation, bring more investment into Turkey and expedite the development of a number of other sectors, notably tourism. This is an opportunity for Turkey to narrow some of the current trade deficit.

As bilateral trade increases among the Silk Road countries, co-operation in a number of major areas – roads, railways, banking, tourism, manufacturing, investment, logistics, energy and tourism – will certainly flourish. As a result, Turkey's business leaders all seem optimistic about the programme and I have yet to hear any negative views being expressed.

If all of the countries concerned work closely together, making the upmost effort to generate mutual benefits, the initiative will be a success. If, however, every country puts its own interests first, the project will surely fail.

Photo: Kolbaşi: “No real obstacle.”
Kolbaşi: "No real obstacle."
Photo: Kolbaşi: “No real obstacle.”
Kolbaşi: "No real obstacle."

Murat Kolbaşi
President of Arzum, Turkey's leading small electrical appliances company, and an executive board member of DEİK, a body set up in 1986 to explore inward and outward investment opportunities as well as looking to increase Turkish exports.

The relations between Turkey and China goes far back and there is our shared history along the legendary Silk Road. In terms of the Belt and Road Initiative, our trade deficit with China does not pose any real obstacle to its success. On the contrary, Turkish culture was originally exported to China along the Silk Road. I believe that the trade deficit will be affected positively by the project.

It will increase our levels of exports to China, particularly with regard to such cultural items as Turkish coffee, Turkish delight, and Turkish bagels. It will also provide a boost to Turkish tourism and to our food exports. I think greater co-operation with China will also provide opportunities for the export of our TV programming, something that will further help spread our culture.

The conclusion of free trade agreements with other countries along the Silk Road is seen as highly desirable by the Turkish business community. The overall initiative has been received positively by the country's commercial leaders.

George Dearsley, Special Correspondent, Istanbul

Content provided by Picture: HKTDC Research
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