Source: AFP
Turkey plans to use its geographic location and an EU customs deal to attract Chinese investors keen to access European markets duty-free, as it recently did with carmaker BYD.
The Chinese electric vehicle giant signed a billion-dollar deal with Ankara on Monday to open a factory in western Turkey, promising to create 5,000 jobs, a move that will help it avoid new EU tariffs.
The country, at the crossroads between Europe, the Middle East and Central Asia, is in talks with other Chinese companies, Turkey’s Industry and Technology Minister Mehmet Fatih Kasir said this week.
“We want to turn Turkey into a production center for the next generation of vehicles,” Kacir told private broadcaster Haberturk.
The minister highlighted his country’s selling points, including being a member of the EU customs union and having trade agreements with 28 countries.
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“Chinese producers want rapid access to international markets,” he said. “Investing in Turkey offers them that.”
The EU recently imposed additional provisional duties of up to 38 percent on Chinese EVs after an investigation concluded that state subsidies meant they were unfairly undermining European competitors.
However, Ankara concluded a customs agreement with the EU in 1995 that allows a number of goods, notably cars, to flow freely between them.
Turkey became one of the leading centers of the world’s auto industry starting in the 1970s, when major automakers such as Fiat and Renault opened factories there — with others such as Ford, Toyota and Hyundai following.
BYD’s Turkish base will allow the Chinese EV specialist to bypass EU tariffs raised by Brussels in July and enter European markets.
Under the new investment incentive regulations, BYD will be able to bypass a new 40 percent tariff that Turkey initially imposed on electric vehicle imports. Manufacturers investing in the country will be exempt.
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A new partnership
At least five other Chinese automakers are now considering opening factories in Turkey, the state-run Anadolu news agency reported.
Turkish manufacturer TOGG and Chinese company Farasis have also partnered to produce EV batteries in Turkey.
Turkish officials have held numerous meetings with Chinese industrialists over the past year, the industry ministry said.
Turkish Foreign Minister Hakan Fidan visited China in June to sign a new bilateral agreement, calling the countries “leaders of Asian wealth.”
His visit to Xinjiang was the first by a senior Turkish official since 2012. The western Chinese province is where Beijing is accused of human rights abuses against more than a million Uyghurs and other Muslim minorities.
Turkish President Recep Tayyip Erdogan deplored China’s policy in Xinjiang, calling it “genocide” in 2009.
But Ankara has since toned down its rhetoric — and Fidan in June reiterated the state’s “absolute support for China’s territorial integrity.”
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Former diplomat Gulru Gezer says that while important, China’s treatment of Uyghurs, who speak a Turkic language, is not the only issue on Beijing and Ankara’s mutual agenda — and should not hinder their relations .
“Fidan’s visit supported that,” he said. “The fact that Beijing let Fidan go to Xinjiang, to talk to the population, were positive steps.”
But not all experts see it that way.
“Welcoming more Chinese investment could change Turkey’s position on the Uyghur issue and push it to implement an extradition deal,” said Ceren Ergenc, an expert on China-Turkey relations at the Center for European Policy Studies.
“This would have a very negative impact on the security of the Uyghur diaspora in Turkey,” which hosts tens of thousands of Uyghur refugees.
‘Common ground’
Many countries, including EU members, want to attract Chinese companies looking to invest in Europe, and Turkey has just started to follow suit, Ergenc said.
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But obstacles remain, he said, citing an EU legal framework on foreign subsidies that could make it difficult for China to “use Turkey as a springboard for Europe.”
“In the past, Chinese companies considered the economic situation in Turkey not reliable enough and preferred Hungary or Poland,” the researcher said.
However, the warming of China and Turkey’s relations is based on mutual interests, Gezer said.
“Ankara and Beijing share common ground, including a multipolar worldview. Their relations will continue to develop in the foreseeable future,” he said.
Erdogan has confirmed his desire to join the Shanghai Cooperation Organization, whose members include China, Russia and Iran, but where Turkey is only a partner.
Source: AFP
