Turkey starts to see positive effects of China’s huge “Belt & Road” initiative

Turkey starts to see positive effects of China’s huge “Belt & Road” initiative
Posted on: 5 Jul 2018

As one of the main players in the Middle East region Turkey  has also an important part to play in China’s huge "Belt and Road Initiative" (BRI) which targets to build links among East Asia, Central Asia, West Asia, Africa and Europe both over land and by sea and establish partnerships among countries and enable balanced and sustainable developments in these countries as well. The initiative of an infrastructure development project was first brought to the agenda by Chinese President Xi Jinping in 2013 and is supposed to cover over 65 countries along its route is also referred to as “One Belt One Road” in Chinese or “Silk Road Economy Belt and 21st Century Maritime Silk Road”. 

Turkey’s officials emphasize that there are strong indications China will expand its investments and business operations in Turkey in other sectors to include energy, logistics, tourism, transportation, infrastructure and e-commerce as well based on developments such as the entry of two Chinese banks to the Turkish financial sector and the acquisition of a port by Chinese investors. Experts also comment that such developments will create new opportunities to boost the economic relations between Turkey and China, mutually.

When we look at the current picture we see that the number of Chinese companies operating in Turkey is increasing at a fast pace and there are nearly 1,000 Chinese firms that have been operating in Turkey's logistics, electronics, energy, tourism, finance and real estate sectors, already. Moreover it is observed that following the entry of Bank of China and Industrial Commercial Bank of China (ICBC) the Turkish market, the interest of Chinese companies in Turkey has further grown based on recorded figures. It is also noteworthy to share that Turkey has been recently enjoying substantial investments from China which invests $120 billion annually in various countries across the world, as the world's second largest trader. Chinese foreign direct investment (FDI) in Turkey has exceeded US$ 2 billion according to the data of the Economy Ministry in the last 15 years.

In order to expand the Turkish-Chinese cooperation in the logistics sector, Turkey's national flag carrier Turkish Airlines (THY), has announced that it will establish a logistics company in Hong Kong in partnership with China’s ZTO Express and Hong Kong’s PAL Air targeting to become one of the world's largest integrators with revenue of $2 billion within the first five years of operation.

On the other hand it is observed that the two countries have been cooperating extensively in the energy and transport sectors, as well. To provide an example to verify this fact Chinese energy companies have increased their presence in Turkey’s energy sector and invested in thermal power plants in Turkey.  Another development noteworthy to share is that Turkey and China are in talks to build a third nuclear power plant in Turkey.

When we look at the tourism sector we see that there are only 27 regular direct flights between two countries to help attract more Chinese tourists. This year Turkey expects to host 500 thousand Chinese tourists. After China declared 2018 “Turkey Tourism Year” the interest of Chinese tourists in Turkey has skyrocketed.

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