16 Nisan 2011 Cumartesi

Yuan trade spurs Chinese banks to rush to Turkey

Pedestrians walk past a branch of the Industrial and Commercial Bank of China. Bloomberg photo

Pedestrians walk past a branch of the Industrial and Commercial Bank of China. Bloomberg photo
Several Chinese banks are preparing to enter the Turkish market by opening branches, a Chinese state official has said.

These potential investors include Industrial and Commercial Bank of China, or ICBC, Ning Zhang, secretary-general of the standing committee of Shenyang Municipal People’s Congress told the Hürriyet Daily News & Economic Review during a Tuesday meeting in Istanbul.

“The interest in Turkey has increased among Chinese finance institutions and I encourage them to open branches in Turkey,” Zhang said.

ICBC is looking for opportunities to open branches in Turkey, according to him. “Turkish and Chinese relations are bound to increase,” he said.

“Having financial institutions actively working in both countries would also increase the foreign direct investment [FDI] volumes.”

Turkey and China agreed to use their currencies, the Turkish Lira and the Chinese yuan, in bilateral trade relations said Turkish Prime Minister Recep Tayyip Erdoğan after having talks with Chinese Premier Wen Jiabao during his official visit to Ankara in November.

“In order to improve the trade and investment relations, we should have Chinese banks operating in Turkey,” Hüsnü Özyeğin, chairperson of the Foreign Economic Relations Board of Turkey, or DEİK, also told the Daily News. “During my visits to Europe, I see new ICBC branches recently opened in Amsterdam, Paris and Frankfurt. I want to see Chinese banks in Istanbul, which is defined as a global finance center according to the master plan of the State Planning Organization.”

Noting that trade ties have developed rapidly between Turkey and China in the last 10 years, Özyeğin said, “I believe the relations could be stronger if Chinese banks would come and open branches here.”

An industrial group that is not involved in trade and investment relations with China could not continue to grow, Özyeğin said at the meeting attended by a delegation of Chinese bureaucrats.

Noting his FİBA Holding’s $250 million shopping mall investment in Shenyang, Özyeğin said Shenyang is an inviting place to make new investments. The mall is set to open in November.

Özyeğin said the gross domestic product volume of China exceeded $5 trillion by the end of last year and left the Japanese economy behind. “The size of the Chinese economy will hit $12.5 trillion by 2020,” said Özyeğin. “This means that an economy the same size as Germany or Japan will be added to the Chinese economy.”


Addressing journalists, Özyeğin said, “There are many chances for possible Chinese investors in Turkey,” adding that there should be more joint ventures formed by Turkish and Chinese firms for making investments in power plants, wind and solar power stations, logistics, ports and mines in Turkey. The number of Chinese firms in Turkey hit 400 by the end of January this year.

“Unfortunately only 34 of the Chinese companies have total capital more than $500,000 in Turkey today.”
Turkey has set up 61 enterprises in Shenyang, one of the most industrialized provinces in the Asian country, with actual use of capital of $27.2 million by the end of August last year, according to figures of the Department of Commerce of Shenyang province.

Turkish firms mainly operate in textiles, communication equipment, computers and other electrical equipment manufacturing.

On the other hand, 36 Chinese firms from Shenyang have invested nearly $25.7 million in machinery, electronics and textiles in Turkey.

Turkey’s export volume to China is still low compared with the booming imports of Chinese products in recent years. Turkey’s exports to China increased from nearly $1.6 billion to 2.25 billion last year while the total volume of imports skyrocketed from $12.67 billion to $17.18 billion by the end of 2010, according to the Turkish Statistics Institute, or TurkSTAT.

“In order to balance the import and export volumes, we should have more Chinese firms investing in Turkey,” said Özyeğin. “We could not compete with the Chinese economy only with nuts and dried fruits.”

Millennium Bank to be renamed

Millennium Bank will fully operate with a new name in the Turkish finance sector in the next three weeks according to Hüsnü Özyeğin, chairperson of the Foreign Economic Relations Board of Turkey, or DEİK, in remarks to journalist on Tuesday at a press meeting held in Istanbul.

Turkey's FİBA Group, owned by Özyeğin, signed an agreement with Banco Comercial Portugues to purchase 95 percent of Millennium Bank in Turkey for $88 million in February last year.

Responding to the criticisms that Turkish Central Bank’s recent measures might decrease the profits of Turkish banks, Özyeğin said, “The decisions and measures of the Central Bank in order to fight the increasing current account deficit are totally right.”

Özyeğin, the third-richest man in Turkey, has $3 billion in wealth, according to Forbes Magazine’s latest report. He also owns Amsterdam-based Credit Europe Bank NV, which operates in countries including Russia, German and Romania.

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