At a time when the relationship between Turkey and the United States is tense and escalates from time to time against the backdrop of the Turkish military operation in Syria, and the purchase of Russian missiles, Ankara’s relations with Beijing, Washington’s economic opponent, is witnessing a boom and recovery.
According to Turkish analyst Metin Gorgan in an article on Al-Monitor, the celebrations of the Chinese diplomatic mission in Ankara and Istanbul mark the 70th anniversary of the founding of China, indicate that Beijing attaches more importance to its diplomatic and economic relations with Ankara at a time when Chinese capital flows to Turkey significantly, which plays Pivotal role in China’s Belt and Road Initiative.
China’s direct investment in Turkey is expected to double by the end of 2019 and exceed $ 4 billion.
Cui Wei, Chinese Consul General in Istanbul, stressed that there will be a big boom in mutual trade, and that Chinese companies will continue to invest in many fields, including infrastructure, energy, mining, telecommunications, information technology, agriculture and health.
Chinese banks are strengthening their presence in the Turkish financial system. According to Bloomberg, China’s central bank transferred $ 1 billion in funds to Turkey in August, the largest amount Turkey received from China under the 2012 yuan exchange deal with Beijing.
The presence of Turkish banks in China is also increasing through the opening of the largest Turkish banks “Akbank”, “Ish Bank” and “Garanti” branches in China. Turkey’s State Agriculture Bank signed a $ 600 million credit agreement with the China Development Bank in 2017 to provide loan guarantees to Chinese companies.
In March, Exim Bank of Turkey signed a $ 350 million credit agreement with China Industrial and Commercial Bank (ICBC). In September, Eximbank, the Chinese bank, issued a $ 140 million loan to the Turkish state-owned bank Waqf for use in bilateral trade.
China is also looking to invest in important facilities in Turkey, such as ports, power plants and terminals. In 2015, a Chinese consortium paid nearly $ 1 billion to buy a 65% stake in Turkey’s Kumport container terminal, in Istanbul. The terminal will serve as a gateway to Turkish markets for Chinese goods.
Following this step, the influx of Chinese infrastructure loans in Turkey accelerated, as the Turkish Banking Regulatory and Supervisory Agency granted operating licenses to the Bank of China and CIB for their activities in Turkey. In July 2018, CIB issued a $ 3.6 billion financing package for Turkey’s energy and transportation sectors. The $ 1.2 billion loan was used to expand the capacity of two underground natural gas storage facilities in Turkey.
Energy is another area where cooperation is growing. A Chinese foundation has paid $ 1.7 billion to finance the construction of a coal plant near the Turkish Mediterranean state of Adana. The plant currently under construction represents China’s largest direct investment in Turkey.
China’s latest project in Turkey was the construction of a series of hospitals in major cities in Turkey that will offer treatments for traditional Chinese medicine as well as modern medicine.
According to experts, there are three main factors that increase Turkey’s importance to the Chinese Belt and Road Initiative: Turkey’s proximity to Europe, a qualified workforce, and a strategic geographic location that facilitates access to the Middle East and North Africa.
Political researcher Altay Atli told Al-Monitor that China’s investment in Turkish infrastructure is important for the belt and road because China is trying to establish a logistics network in the eastern Mediterranean. It is also closely following developments in the Middle East as it looks for post-war reconstruction opportunities in Syria.
According to analyst Metin Gorgan, Chinese investment in Turkey also has political dimensions. First, Beijing is seeking common ground with Ankara on political issues, especially with regard to Uyghurs. Second, China would like to expand its influence in Turkey, which Beijing regards as an important regional player in the Middle East.
For its part, Turkey regards Chinese investment as a boon to its economic and political prospects at a time when Ankara is trying to diversify its alliances with non-Western countries. Turkey sees Chinese investment as an opportunity to boost its economic development, enhance its infrastructure and develop its technology.
If you like the topic you can share with your friends!