Download WHY TURKEY?

“SILK ROAD”
FROM CHINA TO TURKEY
WHY TURKEY?
AN OVERVIEW OF TURKISH ECONOMY
&
TURKISH-CHINESE BILATERAL RELATIONS
Serah Kekeç
Commercial Counselor
Embassy of the Republic of Turkey
CONTENT
 TURKISH ECONOMY IN GENERAL
 WHY TURKEY?
- Investing in Turkey
- Sectors for Cooperation
 TURKEY – CHINA BILATERAL RELATIONS
Turkey is the 16th largest
economy in the World
(6th when compared to EU Countries – IMF/2011)
4
Growth Performance (2012)
 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%.
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GDP
The
biggest
economy
in the
region
(2012,Current prices, Billion $)
%5.0 annual
average growth in
the last 10 years
(US: %1.6, EU:
%1.0, Poland:
%4.3)
Source: IMF
6
GDP Per Capita
Source: Dollar value is from TURKSTAT, PPP GNI value from World Bank
 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.
7
Inflation (Annual Percent Change)
Source: TURKSTAT
 Annual inflation in 2013 was realized as 7.40% and 6.97%
according to CPI and PPI, respectively.
8
General Government Gross
Debt Stock
Turkish
Government’s
gross debt
stock to GDP
ratio is %36,1
while the
EU27 average
is %85,1
Maastricht Criteria
%60
(Q3 - 2012)
Source: Eurostat, Treasury
9
General Government Budget Balance
Turkish
Government’s
budget
balance to
GDP ratio is % 2 while the
EU27 average
is -%4,5
%3
Maastricht
Criteria
(Q3 - 2012)
Source: Eurostat, Treasury
10
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
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among the European countries. (2012, World Bank)
Policy Orientation
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*
GDP (Billion $, Current Prices)
GDP Per Capita ($)
Real GDP Growth (%)
Current Account Balance / GDP (%)
2014*
2015*
858
919
998
11,318
11,982
12,859
4.0
5.0
5.0
-7.1
-6.9
-6.5
12
Foreign Direct Investment Inflows
FDI inflows (cumulative)
Companies with
Intr.Capital (cumulative)
• 1923-2002 : 15 billion USD
• 2003-2012 : 122,4 billion USD
A.T. Kearney FDI Confidence
Index Rankings
2010  23
2012  13
6.000
30.000
The Global Competitiveness
Index Rankings
2011-2012  59
2012-2013  43
25
22,0
20,2
19,5
20
15,9
15
12,4
10,0
10
5
3,4
1,1
1,7
2002
2003
8,4
9,0
2009
2010
2,8
0
2001
2004
2005
2006
2007
2008
2011
2012
13
Turkey’s Foreign Trade
(Billion US$)
450
400
350
300
135
153
241
237
2011
2012
132
250
114
107
200
102
85
74
150
63
100
50
47
36
52
69
98
117
140
170
202
186
141
0
2002
2003
2004
2005
2006
IMPORT
2007
2008
2009
2010
EXPORT
14
Turkey’s Foreign Trade
(Billion US$)
(Billion $)
2012* 2013* 2014** 2015** 2016** 2023***
Exports
Imports
Volume of trade
Balance of trade
Exports/Imports
(%)
* Actual (Source: TURKSTAT)
152.5 151.8
236.5 251.7
389.0 403.5
-84.1 -99.8
64.5 60.3
166.5
262.0
428.5
-95.5
63.5
184.0 202.5
500.0
282.0 305.0
625.0
466.0 507.5 1,125.0
-98.0 -102.5 -125.0
65.2
66.4
80.0
**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,
Turkey has the 5th most liberal trade policies in the world
(World Trade Indicators 2009)
Customs Union
with the EU
Free Trade
Agreements
with 20 countries:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
EFTA
Israel
Macedonia
Croatia
Bosnia & Herzegovina
Palestine
Tunisia
Morocco
Syria
Egypt
11. Albania
12. Georgia
13. Montenegro
14. Serbia
15. Chile
16. Jordan
17. Lebanon
18. Mauritius
19. Korea
*Also ongoing negotiations
16
WHY TURKEY?
17
Why Turkey?
Growth
Markets
Brazil
Russia
India
China
Mexico
Korea
Turkey
Indonesia
• Dynamic, Stable and Attractive Economy
(The Fastest Growing Economy among OECD Countries)
Why Turkey?
Potential of Young Population (2010)
Source: World Bank (2011), TURKSTAT
(2012)
19
Why Turkey?
 Productive and Cost-Effective Labor Force
(The longest hours worked per week of full-time
employment-annual average in Europe(2012))*
20
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)
Why Turkey?
International Hub
An important partner because of its proximity to huge markets
Preferential market access to the European Union and 19 FTA partners
RUSSIAN FEDERATION
EUROPE
GDP – $ 1,5 Trillion
Population - 142 million
GDP – $ 18.4 Trillion
Population – 666 million
4h
MIDDLE EAST AND
NORTH AFRICA
GDP – $ 2,8 Trillion
Population – 636 million
CENTRAL ASIA &
CAUCASUS
GDP – $ 290 billion
Population – 80 million
Why Turkey?
Turkey As An Energy Corridor And Terminal
Existing Natural Gas Pipelines
Existing Oil Pipelines
Natural Gas Pipelines under Construction
Natural Gas Pipelines Underway
Proposed Natural Gas Pipelines
An important bridge between energy suppliers
(Russia, Iran, Azerbaijan) and consumers (EU)
Oil Pipelines under Construction
23
Why Turkey?
Structural Reforms
Corporate
Income
Tax %20
National
Treatment
Protection
Against
Expropriation
Guarantee
of Transfers
NewFDI
Law &
Other
Legislation
Freedom
to invest
Employment
of Expatriates
Int’l
Arbitration
Access
to Real
Estate
Policies to bring together international capital with
Turkey’s assets
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
(Coordination Council for Improvement of Investment Climate, Investment Advisory Council)
Support Measures
The New Investment Incentives Program
Regional
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
General Investment
Incentive Scheme
- Customs Duty
Exemption
- VAT Exemption
- Income Tax
Withholding
Allowance Support
(In Region 6)
- Interest Support
- VAT Refund
- Income Tax
Withholding Allowance
Support (In Region 6)
- Social Security
Premium Support
(Employee’s Share) (In
Region 6)
26
26
The New Investment Incentive Scheme
2
1
1
4
2
1
2
3
3
4
1
2
3
1
•
•
•
•
•
•
•
•
5
3
5
2
3
4
1
5
2
5
3
3
5
4
2
5
4
5
3
4
5
5
6
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
27
28
Turkey-China Bilateral Relations
Turkey-China Trade Relations
1. Phase : A Remote Trade Partner
Export-2000
: 96 Million US $
Import-2000
: 1,34 Billion US $
Volume
: 1,44 Billion US $
Balance
: 1,24 Billion US $
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 $
3. Phase : One of the Main Trade Partners
Export-2010
: 2,26 Million US $
Import-2010
: 17,18 Million US $
Volume
: 19,44 Million US $
Balance
: 14,92 Million US $
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%
Turkey’s Export to China
(The first 10 product
(million US $)
groups)
HS
CODE
TOTAL
2009
2010
2011
2012
1.599,1
2.259,8
2.467,0
2.833,4
PRODUCT NAME
All products
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
30
Turkey’s Imports from China
(The first 10 product
groups)
HS
CODE
PRODUCT NAME
TOTAL
All products
(million US $)
2009
2010
2011
2012
12.676,6
17.180,0
21.692,0
21.295,0
886,9
977,8
1.481,2
1.651,3
1.232,9
1.433,7
1.492,7
1.612,8
474,8
583,9
602,0
495,7
40,3
49,0
71,8
468,3
8517
Electric app for line telephony,incl curr line system
8471
Automatic data processing machines;optical reader, etc
8531
Electric sound/visual signallg app (e.g. bell/siren, fire
alarms)
8529
Parts for television, radio and radar apparatus
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
31
FAVOURABLE SECTORS FOR
BILATERAL COMMERCIAL AND INVESTMENT RELATIONS
TELE
ENERGY
TRANSPORTATION
MINING
AUTOMOTIVE &
AUTOPARTS
INDUSTRIES
CONSTRUCTION
IT & SOFTWARE
IRON & STEEL
NATURAL &
PRECIOUS STONES
FURNITURE
LEATHER
ARTICLES
TEXTILE
MACHINE &
EQUIPMENT
AGRICULTURE
COMMUNICATION
TOURISM
32
Turkey-China Economic Relations
MAIN GOAL:
Deepened Commercial and Economic Cooperation
Sustainable Relations
Strategic 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 projects
Sectoral 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
33
Political Determination
-Xi Jingping, Vice President of PRC, Turkey visit in February 2012
* Official Meetings and Business Forum
* Important Agreements
- R. Tayyip Erdoğan, 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
34
THANK YOU FOR YOUR ATTENTION !
35