Turkey plans to draw on its geographical position and an EU customs deal to entice Chinese investors keen to access European markets tariff-free, as it recently just did with automaker BYD Co (比亞迪).
The Chinese electric vehicle giant on Monday signed a billion-dollar deal with Ankara to open a plant in western Turkey, promising to create 5,000 jobs, a move that would help it dodge new EU tariffs.
The country, at the crossroads between Europe, the Middle East and Central Asia, is in talks with other Chinese companies, Turkish Minister of Industry and Technology Mehmet Fatih Kacir said this week.
Photo: AFP
“We want to transform Turkey into a production center for the next generation of vehicles,” Kacir told private broadcaster Haberturk.
The minister emphasized his country’s selling points, including being part of the EU’s customs union and having trade agreements with 28 countries.
“Chinese producers want rapid access to international markets,” he said. “Investing in Turkey offers them that.”
The EU recently slapped additional provisional tariffs of up to 38 percent on Chinese electric vehicles following an investigation which concluded that Chinese state subsidies for its electric vehicle industry were unfairly undermining European rivals.
However, Ankara struck a customs deal with the EU in 1995 that enables the free flow between them of a number of goods, notably cars.
Turkey became one of the leading centers of the world’s automobile industry starting in the 1970s, when major automakers, including Fiat Automobiles SpA and the Renault Group, opened plants there — with others such as Ford Motor Co, Toyota Motor Corp and Hyundai Motor Co following.
BYD’s Turkish base would allow the Chinese electric vehicle specialist to bypass EU tariffs upped by Brussels this month, and enter European markets.
Under new regulations on investment incentives, BYD would be able to circumvent a new 40 percent tariff that Turkey originally imposed on electric vehicle imports. Manufacturers investing in the country would be exempt.
At least five other Chinese automakers are now considering opening plants in Turkey, state-owned news agency Anadolu reported.
Turkish officials have held numerous meetings with Chinese industrialists in the last year, the Turkish Ministry of Industry and Technology said.
XINJIANG CONCERNS
Turkish Minister of Foreign Affairs Hakan Fidan last month visited China to seal a new bilateral deal, calling the countries “drivers of Asian wealth.”
His visit to the Xinjiang region was the first by a high-ranking Turkish official since 2012. Xinjiang is where Beijing is accused of human rights violations against more than 1 million Uighurs and other Muslim minorities.
Turkish President Recep Tayyip Erdogan previously criticized China’s policy in Xinjiang, calling it “genocide” in 2009, but Ankara has since toned down its rhetoric — and Fidan last month reiterated the state’s “total support for China’s territorial integrity.”
Former Turkish diplomat Gulru Gezer said that while it is important, China’s treatment of the Uighurs, who speak a Turkic language, is not the only issue on Beijing and Ankara’s mutual agenda — and it should not hamper their relations.
“Fidan’s visit supported this,” she said. “The fact that Beijing let Fidan go into Xinjiang, talk to the population, were positive steps.”
Yet not all experts see it that way.
“Welcoming more Chinese investment could change Turkey’s position on the Uighur issue and push it to implement an extradition agreement,” said Ceren Ergenc, an expert of China-Turkey relations at the Centre for European Policy Studies.
“This would have a very negative impact on the security of the Uighur diaspora in Turkey,” which hosts dozens of thousands of Uighur refugees, she said.
‘COMMON GROUND’
Many countries, including EU members, want to attract Chinese firms looking to invest in Europe, and Turkey has only just started following suit, Ergenc said.
However, obstacles remain, she said, citing an EU legal framework on foreign subsidies that could make it harder for China to “use Turkey as a springboard for Europe.”
“In the past, Chinese companies considered that the economic situation in Turkey was not reliable enough, and preferred Hungary or Poland,” she said.
However, China and Turkey’s warming relations are 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,” she said.
Erdogan has confirmed his desire to join the Shanghai Cooperation Organisation, whose members include China, Russia and Iran, but to which Turkey is only a partner.
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