“silk road” from china to turkey. serah kekeç commercial counselor embassy of the republic of...
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“SILK ROAD”
FROM CHINA TO TURKEY
Serah KekeçCommercial Counselor
Embassy of the Republic of Turkey
WHY TURKEY?AN OVERVIEW OF TURKISH ECONOMY
&TURKISH-CHINESE BILATERAL RELATIONS
CONTENTTURKISH ECONOMY IN GENERAL
WHY TURKEY? - Investing in Turkey- Sectors for Cooperation
TURKEY – CHINA BILATERAL RELATIONS
4
Turkey is the 16th largest economy in the World
(6th when compared to EU Countries – IMF/2011)
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Turkey has quickly recovered from the global financial crisis and among the least affected countries from current economic uncertainties
Turkey has the highest economic growth rate in Europe Average annual growth rate between 2002 and 2012 is 5.2% Real GDP growth for 2011 has been realized as 8.8% Real GDP growth for 2012 realized as 2.2%.
Growth Performance (2012)
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GDP (2012,Current prices, Billion $)
The biggest economy in the region
%5.0 annual average growth in the last 10 years (US: %1.6, EU: %1.0, Poland: %4.3)Source: IMF
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GDP Per Capita
Since 2002 GDP per capita has tripled from 3,492 USD to 10,497 USD. According to Purchasing Power Parity (PPP) GNI per capita surpassed 18 thousand USD.
Source: Dollar value is from TURKSTAT, PPP GNI value from World Bank
8
Source: TURKSTAT
Inflation (Annual Percent Change)
Annual inflation in 2013 was realized as 7.40% and 6.97% according to CPI and PPI, respectively.
9Source: Eurostat, Treasury
Turkish Government’s gross debt stock to GDP ratio is %36,1 while the EU27 average is %85,1
(Q3 - 2012)
General Government GrossDebt Stock
Maastricht Criteria%60
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General Government Budget Balance
Source: Eurostat, Treasury
Turkish Government’s budget balance to GDP ratio is -% 2 while the EU27 average is -%4,5
(Q3 - 2012)
%3Maastricht
Criteria
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Unemployment Rates (%)
In December 2013, unemployment rate was 10.0% and seasonally adjusted unemployment rate was 9.4%.
In 2013, unemployment rate was 9.7%. Seasonally adjusted unemployment rate in Euro Area was 12.0% and 10.8% in
(EU28) in January 2014. In terms of unemployment ratio Turkey outperformed 14 EU countries according to current data.
After Russia, Germany, England and France, Turkey has the 5th largest labor force among the European countries. (2012, World Bank)
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The year 2023 would be the centenary of Turkish Republic’s establishment. Therefore we set up a challenging vision for 2023. By year 2023, we do intend;
to take place among the top 10 economies in the world, to achieve an annual export level of 500 billion USD and to raise per capita income to 25 thousand USD.
Medium Term Program (2013-15) aims to sustain economic growth, to decrease the current account deficit, and to preserve macroeconomic and financial stability.
2013* 2014* 2015*
GDP (Billion $, Current Prices) 858 919 998
GDP Per Capita ($) 11,318 11,982 12,859
Real GDP Growth (%) 4.0 5.0 5.0
Current Account Balance / GDP (%) -7.1 -6.9 -6.5
Policy Orientation
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1,1 1,72,8
10,0
22,0
19,5
8,4 9,0
15,9
12,4
20,2
3,4
0
5
10
15
20
25
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Foreign Direct Investment Inflows
FDI inflows (cumulative) Companies with Intr.Capital (c
umulative)• 1923-2002 : 15 billion USD 6.000• 2003-2012 : 122,4 billion USD 30.000
A.T. Kearney FDI Confidence The Global CompetitivenessIndex Rankings Index Rankings2010 23 2011-2012 592012 13 2012-2013 43
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Turkey’s Foreign Trade (Billion US$)
6998 117
140170
202
141186
241 23747
6374
85
107
132
102
114
135 153
52
36
0
50
100
150
200
250
300
350
400
450
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
IMPORT EXPORT
Turkey’s Foreign Trade (Billion US$)
* Actual (Source: TURKSTAT)**Forecast: Medium Term Programme, Ministry of Development- 10/09/2012)
Major EXPORT Partners - 2012; Germany (%9), Iraq (%7), Iran (%7), UK (%6), UAE (%5), Russian Fed. (%4), Italy (%4)
Major EXPORT Items - 2012; Automotive and autoparts, Machinery, Iron & Steel, Electrical Appliances, Clothing
Major IMPORT Partners-2012; Russia (%11), Germany (%9), China (%9), USA (%6), Italy (%6), Iran (%5), Fransa (%4)
Major IMPORT Items-2012; Petroleum & Gas, Machinery, Automotive & Autoparts,
(Billion $) 2012* 2013* 2014** 2015** 2016** 2023***
Exports 152.5 151.8 166.5 184.0 202.5 500.0Imports 236.5 251.7 262.0 282.0 305.0 625.0Volume of trade 389.0 403.5 428.5 466.0 507.5 1,125.0Balance of trade -84.1 -99.8 -95.5 -98.0 -102.5 -125.0Exports/Imports (%) 64.5 60.3 63.5 65.2 66.4 80.0
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Turkey has the 5th most liberal trade policies in the world (World Trade Indicators 2009)
Customs Union
with the EU
1. EFTA2. Israel3. Macedonia4. Croatia5. Bosnia & Herzegovina6. Palestine7. Tunisia8. Morocco9. Syria10. Egypt
11. Albania12. Georgia13. Montenegro14. Serbia15. Chile16. Jordan17. Lebanon18. Mauritius19. Korea*Also ongoing negotiations
Free TradeAgreements with 20
countries:
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WHY TURKEY?
Growth Markets
Brazil
Russia
India
China
Mexico
Korea
Turkey
Indonesia
Why Turkey?
• Dynamic, Stable and Attractive Economy (The Fastest Growing Economy among OECD
Countries)
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Why Turkey?Potential of Young Population (2010)
Source: World Bank (2011), TURKSTAT (2012)
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Why Turkey?
Productive and Cost-Effective Labor Force (The longest hours worked per week of full-
time employment-annual average in Europe(2012))*
Why Turkey? A potential market with 74 million
consumers
Increasing GDP Per Capita (10,444 USD per capita income 2011)
Fast Growing Country (2010-8,9%, 2011-8,5%)
(According to OECD, Turkey is expected to be the fastest growing OECD country for the years 2011-2017 with 6,7% average)
EUROPE
GDP – $ 18.4 Trillion Population – 666 million
RUSSIAN FEDERATION
GDP – $ 1,5 Trillion Population - 142 million
MIDDLE EAST AND NORTH AFRICA
GDP – $ 2,8 Trillion Population – 636 million
CENTRAL ASIA & CAUCASUS
GDP – $ 290 billion Population – 80 million
International HubAn important partner because of its proximity to huge marketsPreferential market access to the European Union and 19 FTA partners
Why Turkey?
4h
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An important bridge between energy suppliers (Russia, Iran, Azerbaijan) and consumers (EU)
Turkey As An Energy Corridor And TerminalWhy Turkey
?
Existing Natural Gas Pipelines
Existing Oil Pipelines
Natural Gas Pipelines under Construction
Natural Gas Pipelines Underway
Proposed Natural Gas Pipelines
Oil Pipelines under Construction
National TreatmentNewFDI
Law &
Other Legislation
Corporate IncomeTax %20
Protection Against
Expropriation
Freedom to invest
Employment of Expatriates
Int’lArbitration
Access to Real
Estate
Guarantee of
Transfers
Structural Reforms
Why Turkey?
FDI Regime • National treatment • No pre-entry screening /minimum capital requirements • Right to acquire real estate• Guarantee to transfer proceeds• Right to employ key expatriate staff• Right to access international dispute settlement
• Bilateral Investment Treaties with 86 countries• Double Taxation Agreements with 78 countries• Customs Union with the EU• Free Trade Agreements with 19 countries
Improving investment climate : Moving target for the government since 2002
• Streamlining procedures for investments and eliminating administrative and bureaucratic hurdles in line with changing priorities and needs of business
• Political ownership• Making full use of public-private dialogue through permanent platforms (Co
ordination Council for Improvement of Investment Climate, Investment Advisory Council)
Policies to bring together international capital with Turkey’s assets
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The New Investment Incentives ProgramRegional
Investment Incentive Scheme
- Customs Duty Exemption
- VAT Exemption
- Tax Deduction
- Social Security Premium Support (Employer’s Share)
- Land Allocation
- Interest Support
- Income Tax Withholding Allowance Support (In Region 6)
- Social Security Premium Support (Employee’s Share) (In Region 6)
Large Scale Investment Incentive Scheme
- Customs Duty Exemption
- VAT Exemption
- Tax Deduction
- Social Security Premium Support (Employer’s Share)
- Land Allocation
- Income Tax Withholding Allowance Support (In Region 6)
- Social Security Premium Support (Employee’s Share) (In Region 6)
Strategic Investment Incentive Scheme
- Customs Duty Exemption
- VAT Exemption
- Tax Deduction
- Social Security Premium Support (Employer’s Share)
- Land Allocation
- Interest Support
- VAT Refund
- Income Tax Withholding Allowance Support (In Region 6)
- Social Security Premium Support (Employee’s Share) (In Region 6)
General Investment Incentive Scheme
- Customs Duty Exemption
- VAT Exemption
- Income Tax Withholding Allowance Support (In Region 6)
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Support Measures
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1
1
1
1
1
2
2
222
2
33
333
3
3
3
44
4
4
44
5
55
5
5
55
65
51
2
The New Investment Incentive Scheme
• V.A.T. Exemption (for the imported and domestically provided Machinery and Equipment)• Customs Duty Exemption (for the imported Machinery and Equipment)• Reduced Corporate Income Tax (C.I.T. between %2 - %10)• Social Security Premium Support (Both Employer’s and Employee’s Share, for 2 – 12 years)• Land Allocation• Interest Support• Income Tax Withholding Allowance• VAT Refund for Construction Expenses
Turkey-China Bilateral Relations28
2. Phase: Ever-increasing Trade Relations
Export -2005 : 550 Million US $
Import-2005 : 6,88 Billion US $
Volume : 7,43 Billion US $
Balance : 6,33 Billion US $
1. Phase: A Remote Trade PartnerExport-2000 : 96 Million
US $ Import-2000 : 1,34 Billion
US $ Volume : 1,44 Billion
US $ Balance : 1,24 Billion
US $
3. Phase: One of the Main Trade PartnersExport-2010 : 2,26 Million US $ Import-2010 : 17,18 Million US $ Volume : 19,44 Million US $ Balance : 14,92 Million US $
Turkey-China Trade Relations
Million US Dollar Change (%)
2010 2011 2012 2013 2011-2012 2012-2013
Export 2,269 2,466 2,833 3,602 15% 27%
Import 17,180 21,693 21,295 24,686 -2% 16%
Volume 19,450 24,160 24,129 28,289 0% 17%
Deficit -14,911 -19,227 -18,462 -21,084 -4% 14%
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Turkey’s Export to China
HS CODE PRODUCT NAME
2009 2010 2011 2012
TOTAL All products 1.599,1 2.259,8 2.467,0 2.833,4
2515 Marble, travertine, ecaussine etc, 350,6 589,6 630,6 779,9
2610 Chromium ores and concentrates 236,6 414,8 385,5 360,4
2603 Copper ores and concentrates 234,0 273,3 193,0 267,6
2840 Borates; peroxoborates (perborates) 124,4 165,3 233,7 231,4
2607 Lead ores and concentrates 16,0 56,5 80,0 102,6
2528 Natural borates & concentrates; natural boric acid not more than 85% h
42,4 73,2 90,3 82,9
2616 Precious-metal ores and concentrates 0,1 0,6 0,5 63,8
2608 Zinc ores and concentrates 36,6 54,3 43,1 62,9
2810 Oxides of boron; boric acids 20,1 48,8 58,7 38,6
5501 Synthetic filament tow 21,8 32,7 36,8 37,9
(The first 10 product groups)
(million US $)
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Turkey’s Imports from China (The first 10 product
groups)
(million US $)
HS CODE PRODUCT NAME
2009 2010 2011 2012
TOTAL All products 12.676,6 17.180,0 21.692,0 21.295,0
8517 Electric app for line telephony,incl curr line system 886,9 977,8 1.481,2 1.651,3
8471 Automatic data processing machines;optical reader, etc 1.232,9 1.433,7 1.492,7 1.612,8
8531 Electric sound/visual signallg app (e.g. bell/siren, fire alarms)
474,8 583,9 602,0 495,7
8529 Parts for television, radio and radar apparatus 40,3 49,0 71,8 468,3
5402 Synthetic filam yarn, not put up 179,3 253,3 333,0 438,7
8502 Electric generating sets and rotary converters 118,4 395,2 116,9 354,2
9503 Other toys; scale model (puzzles of all kinds, stuffed toys, electric t
178,4 263,8 390,6 338,4
8414 Air/vacuum pumps, air/other gas compressors & fans 129,8 189,2 256,8 307,5
8504 Electric transformers, static converters & inductors 161,7 211,6 276,2 261,4
8443 Printing machinery; machines for uses ancillary to printing
164,4 237,1 275,7 258,9
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FAVOURABLE SECTORS FOR BILATERAL COMMERCIAL AND INVESTMENT RELATIONS
ENERGY
AUTOMOTIVE & AUTOPARTS INDUSTRIES
NATURAL & PRECIOUS STONES
TRANSPORTATION
CONSTRUCTION
FURNITURE
MINING
IT & SOFTWARE
LEATHER ARTICLES
MACHINE & EQUIPMENT
AGRICULTURE
TEXTILE
IRON & STEEL
TELECOMMUNICATIO
N
TOURISM
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MAIN GOAL: Deepened Commercial and Economic CooperationSustainable RelationsStrategic Partnership
- Sustainable and Mutually Beneficial Trade Relations
- Consolidation of Relations Through Economic Cooperation* Reciprocal Investments* Reciprocal Investments to State Bonds* Strengthening Financial Cooperation * Improving relations in the banking sectors and opening branches* Cooperation in the 3rd countries in the contracting sector* Cooperation in the infrastructure projectsSectoral Cooperation (energy, transportation, telecomunication etc. )* Cooperation in the fields of Energy and Transportation* Cooperation in tourism
- Improvement of cooperation in the regional and multilateral platforms
Turkey-China Economic Relations
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- Xi Jingping, Vice President of PRC, Turkey visit in February 2012* Official Meetings and Business Forum* Important Agreements
- R. Tayyip Erdo an, ğ Prime Minister of Turkey, China visit in April 2012* Offical Meetings, Business Forum, Investment Forum * Important Agreements
- Important Agreements* Financial Technical Cooperation Agreement* Swap Agreement* Protocol on Banking Cooperation* Tobacco Protocol* Letter of Intent for Nuclear Cooperation * Agreement on Food Safety
Political Determination
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THANK YOU FOR YOUR ATTENTION !