Turkey & China: Economic RelationsMay 9, 2013Mehmet ŞimşekMinister of Finance1
OutlineTurkey & China: Economic RelationsA Huge Upside in Bilateral Trade• China: a large open economy• A shift to local c...
Turkey & ChinaEconomic Relations3
Turkey-China TradeSource: TURKSTAT(12monthrolling,billion$)4China is Turkey’s 3rd largest trading partner1,422,10,33,10510...
Turkey-Asia TradeSource: TURKSTAT(12monthrolling,billion$)5554972010203040506070802002 2013 MarchExport ImportChina accoun...
China-Turkey: Dismal FDI FlowsSource: CBRT(Million$)6024681012141618202002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20...
7Turkey-China: Areas of Cooperation• Infrastructure• Energy• Health• Education• AgricultureHuge InvestmentNeeds in Turkey•...
Turkey-China: Areas of Cooperation• Textiles• Iron and steel• Construction• Tourism• Finance• Telecommunication• Agricultu...
Turkey is a well-Diversified EconomyIntheworld16th largest economy2nd largest construction/contracting industry4th biggest...
10Major Bilateral AgreementsAgreement forthe Avoidance ofDouble TaxationSwapAgreement3 billion TL(10 billion CNY)Joint Dec...
A Huge Upside in Bilateral TradeWhy? China: a very large open economyA shift to local currencies should boosttradeTurkey: ...
CHINA:A very Large Open Economy12
GDP based on PPP$12.4 trillionA very Large Open Economy2ndSource: IMFExports$2 trillionImports$1.8 trillion1st2ndGlobal Ra...
GDPSource: IMF15,78,26,03,42,624681012141618United States China Japan Germany FranceGDP2012(USDtrn)In PPP terms, China wil...
TradeSource: IMF2012(USDtrn)153,9 3,92,61,70,00,51,01,52,02,53,03,54,04,5United States China Germany JapanChina has the 2n...
Center of Gravity is shifting East16
China28%India11%UnitedStates18%Japan4%Euro Area12%OtherOECD13%Turkey1,9%Othernon-OECD12%Composition of Global GDPSource: O...
Relative size of G7 and E7 economies:2011 and 2050Source: World in 2050, January 2013, PwCE7 Countries: China, India, Bras...
Rising Use of Local Currencies19
TL and RMB as World PaymentsCurrenciesSource: The Society for Worldwide Interbank Financial Telecommunication (SWIFT)• 0.7...
Rapid Expansion of RMB in Chinese TradeSource: HSBC3912024681012142010 2012 2013RMBsettlement(%China’stotaltrade)181732450...
RMBuse(%,Chinesetrade)The Potential of RMB2,66,48,233,000051015202530352010 2011 2012 2015ESource: HSBC22
TL: Limited But Rising Use in BilateralTrade230.2%(2002)4%(2012)1%(2002)3%(2012)Bilateral agreements signed with Russia, C...
Rising Use of Local Currencies will boostBilateral Trade24Reduceforeignexchange risksReducetransactioncostsStrengthenrelat...
TURKEY:Strong-Medium to Long-Term Prospects25
Significant transformation over the pastdecade26
Political Stability17126020406080100120140Average Life Span of Governmentsbefore 2002Average Life Span of Governments post...
Rapidly Growing Economy3.15.12,533,544,555,51993-2002 2003-12Source: TURKSTAT28(Growth,%)
Real Convergence with Advanced EconomiesIncomePerCapita(PPP,%)Kaynak: IMF, OECD, TURKSTAT23,535,033,251,220253035404550552...
Low Deficit10,87,94,10,1-1,30,21,65,53,00,41,3 1,5 1,2 0,9-2,00,02,04,06,08,010,012,02002 2003 2004 2005 2006 2007 2008 20...
74,067,759,652,746,539,9 40,046,142,339,136,135,033,031,030,035,040,045,050,055,060,065,070,075,02002 2003 2004 2005 2006 ...
Declining Inflation RateSource: TURKSTATLowest rate for the past 44 years32107,2125,599,16,2020406080100120140198019811982...
Well-Capitalized Banking Sector(CapitalAdequacyRatio,%)Target Rate 12%Legal Rate 8%Source: BRSACapital adequacy ratio twic...
Household Leverage is LowSource: CBRT, ECB(HouseholdLiabilities,%ofGDP,2012Q3)65,720,30 20 40 60 80 100 120 140 160Denmark...
Source: CBRT, Cetinkaya, March 2013, BRSA(Corporateliabilities,%,GDP)36,80 20 40 60 80 100 120LuxembourgSpainPortugalNethe...
But Low Savings is a Challenge forTurkey36
(%)1012141618202224262002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Savings-Investment GapSource: Ministry of Devel...
Current Account Deficit(12MonthRolling,USDbn)Source: CBRT38-80-60-40-2002040 2002-147102003-147102004-147102005-147102006-...
-505101520252002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Public Savings/GDP Private Savings/GDP(%)Source: Ministr...
Priorities & Reform AgendaEnhancingCompetitionDeepening CapitalMarketsEducationImproving LaborMarket FlexibilityLocal & Re...
Reconciliation Process41
GDPSource: TURKSTAT, Medium-Term Program,PwC200220502002$ 230billion2050$ 5 trillion2012$ 786 billion2023$ 2 trillion42
GDP per CapitaSource: TURKSTAT, Medium-Term Program,PwC200220502002$ 3,4922012$10,5042023$ 25,0002050$ 50,00043
Ambitious TargetsSource: IMF, PricewaterhouseCoopers1. USA2. China3. India4. Japan5. Germany6. Russia8. UK7. Brazil9. Fran...
Determinants of Long-Term GrowthQuality ofInstitutionsDemographicsProductivity45
Quality of InstitutionsCombattingcorruptionCreating a levelplaying fieldImprovinginternationalcompetitiveness46
Corruption Perceptions Index (2002)(65th among 102 countries)Source: Transparency International 47514303443565964 65737887...
Corruption Perceptions Index (2012)(54th among 174 countries)Source: Transparency International48514374554 5479 8088941051...
Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.(71st among 125 countries)Sourc...
(43rd among 144 countries)Source: World Economic ForumGlobal Competitiveness Index (2012)Moved up 16 places in a year2nd f...
(84th among 175 countries)Source: World BankEase of Doing Business (2006)51261923 2543848998108121131138020406080100120140...
(71st among 185 countries)Source: World BankEase of Doing Business (2012)521 281216 1871819199128132138020406080100120140S...
Favorable DemographicsSource: EurostatShareof15-24yearsoldinTotalPop.(%)15,816,87 9 11 13 15 17 19 21AndorraItalyGreeceSpa...
AnnualAveragePopulationGrowthRate(%,2001-11)Growth Rate of Working-Age PopulationSource: OECD, Eurostat, TURKSTAT, UN 542,...
REER AppreciationSource: CBRT(2003=100)5565758595105115125135 1989-171990-171991-171992-171993-171994-171995-171996-171997...
Thank You!谢谢56
Upcoming SlideShare
Loading in …5
×

Turkey & China: Economic Relations

870 views

Published on

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
870
On SlideShare
0
From Embeds
0
Number of Embeds
21
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Turkey & China: Economic Relations

  1. 1. Turkey & China: Economic RelationsMay 9, 2013Mehmet ŞimşekMinister of Finance1
  2. 2. OutlineTurkey & China: Economic RelationsA Huge Upside in Bilateral Trade• China: a large open economy• A shift to local currencies should boost trade• Turkey: strong medium-to long-term prospects2
  3. 3. Turkey & ChinaEconomic Relations3
  4. 4. Turkey-China TradeSource: TURKSTAT(12monthrolling,billion$)4China is Turkey’s 3rd largest trading partner1,422,10,33,10510152025302002 2013 MarchExports toChinaImportsfromChina
  5. 5. Turkey-Asia TradeSource: TURKSTAT(12monthrolling,billion$)5554972010203040506070802002 2013 MarchExport ImportChina accounts for 31% of Turkish imports from AsiaBut only 6% of Turkish exports to Asia
  6. 6. China-Turkey: Dismal FDI FlowsSource: CBRT(Million$)6024681012141618202002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Inflows to Turkey Outflows from Turkey
  7. 7. 7Turkey-China: Areas of Cooperation• Infrastructure• Energy• Health• Education• AgricultureHuge InvestmentNeeds in Turkey• $3.3 trn• 2/3 in $• 1/4 in €Huge Reserves inChina
  8. 8. Turkey-China: Areas of Cooperation• Textiles• Iron and steel• Construction• Tourism• Finance• Telecommunication• Agriculture• Food• Electronics8
  9. 9. Turkey is a well-Diversified EconomyIntheworld16th largest economy2nd largest construction/contracting industry4th biggest cement producer, 1th in Europe6th largest agricultural economy6th largest in # of tourist arrivals9th biggest commercial vehicle producer7th biggest geothermal energy potential17th biggest motor vehicle producer9
  10. 10. 10Major Bilateral AgreementsAgreement forthe Avoidance ofDouble TaxationSwapAgreement3 billion TL(10 billion CNY)Joint DeclarationonEstablishmentandDevelopment ofStrategicPartnershipNegotiations for the Agreement on Encouragement andReciprocal Protection of Investments
  11. 11. A Huge Upside in Bilateral TradeWhy? China: a very large open economyA shift to local currencies should boosttradeTurkey: strong medium-to long-termprospectsRoom for further cooperation11
  12. 12. CHINA:A very Large Open Economy12
  13. 13. GDP based on PPP$12.4 trillionA very Large Open Economy2ndSource: IMFExports$2 trillionImports$1.8 trillion1st2ndGlobal Rank 2012:1310% average growth since 1990s
  14. 14. GDPSource: IMF15,78,26,03,42,624681012141618United States China Japan Germany FranceGDP2012(USDtrn)In PPP terms, China will surpassthe US by 201714
  15. 15. TradeSource: IMF2012(USDtrn)153,9 3,92,61,70,00,51,01,52,02,53,03,54,04,5United States China Germany JapanChina has the 2nd largesttrade volume in the world
  16. 16. Center of Gravity is shifting East16
  17. 17. China28%India11%UnitedStates18%Japan4%Euro Area12%OtherOECD13%Turkey1,9%Othernon-OECD12%Composition of Global GDPSource: OECD Economic Policy Paper No. 3: Looking to 2060: A global vision of long-term Growth - 2012201120302060PercentageofglobalGDPin2005PPPs(%)17China17%India7%UnitedStates23%Japan7%Euro Area17%OtherOECD16%Turkey1,7%Othernon-OECD11%China28%India18%UnitedStates16%Japan3%Euro Area9%OtherOECD12%Turkey2,1%Othernon-OECD12%
  18. 18. Relative size of G7 and E7 economies:2011 and 2050Source: World in 2050, January 2013, PwCE7 Countries: China, India, Brasil, Russia, Indonesia, Mexico & TurkeyMER: Market Exchange Rate120804018GDP(Constant,2011trn$)E7 economies will surpass G7 by 2050
  19. 19. Rising Use of Local Currencies19
  20. 20. TL and RMB as World PaymentsCurrenciesSource: The Society for Worldwide Interbank Financial Telecommunication (SWIFT)• 0.74% of banking transactionsRMB ranks 13th• 0.35% of banking transactionsTL ranks 18th20
  21. 21. Rapid Expansion of RMB in Chinese TradeSource: HSBC3912024681012142010 2012 2013RMBsettlement(%China’stotaltrade)181732450501001502002503001Q10 2011 2012MonthlyaverageRMBtradevolume(bnRMB)21
  22. 22. RMBuse(%,Chinesetrade)The Potential of RMB2,66,48,233,000051015202530352010 2011 2012 2015ESource: HSBC22
  23. 23. TL: Limited But Rising Use in BilateralTrade230.2%(2002)4%(2012)1%(2002)3%(2012)Bilateral agreements signed with Russia, China &Pakistan will support the use of TL
  24. 24. Rising Use of Local Currencies will boostBilateral Trade24Reduceforeignexchange risksReducetransactioncostsStrengthenrelationshipwithcounterpartiesSource: HSBC
  25. 25. TURKEY:Strong-Medium to Long-Term Prospects25
  26. 26. Significant transformation over the pastdecade26
  27. 27. Political Stability17126020406080100120140Average Life Span of Governmentsbefore 2002Average Life Span of Governments post20021923-2002 AK Party27MonthsPoliticalStability2023Targets2071Perspective
  28. 28. Rapidly Growing Economy3.15.12,533,544,555,51993-2002 2003-12Source: TURKSTAT28(Growth,%)
  29. 29. Real Convergence with Advanced EconomiesIncomePerCapita(PPP,%)Kaynak: IMF, OECD, TURKSTAT23,535,033,251,220253035404550552002 2012Turkey /USA Turkey /Euro Zone29
  30. 30. Low Deficit10,87,94,10,1-1,30,21,65,53,00,41,3 1,5 1,2 0,9-2,00,02,04,06,08,010,012,02002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Maastricht Criteria: 3%Medium-Term Program(2013-15)Achieved Maastricht Criteria except 2009Source: Ministry of DevelopmentBudgetDeficit-to-GDP,%30
  31. 31. 74,067,759,652,746,539,9 40,046,142,339,136,135,033,031,030,035,040,045,050,055,060,065,070,075,02002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Medium-Term Program(2013-15)Low DebtDebt-to-GDP,%Satisfying Maastricht Criteria since 2004Maastricht Criteria: 60%Source: Treasury31
  32. 32. Declining Inflation RateSource: TURKSTATLowest rate for the past 44 years32107,2125,599,16,20204060801001201401980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122023 target low single-digits(y/y,%)
  33. 33. Well-Capitalized Banking Sector(CapitalAdequacyRatio,%)Target Rate 12%Legal Rate 8%Source: BRSACapital adequacy ratio twice theminimum legal limit of 8%.33051015202530352003-1592004-1592005-1592006-1592007-1592008-1592009-1592010-1592011-1592012-1592013-1
  34. 34. Household Leverage is LowSource: CBRT, ECB(HouseholdLiabilities,%ofGDP,2012Q3)65,720,30 20 40 60 80 100 120 140 160DenmarkNetherlandsIrelandUnited KingdomPortugalSwedenSpainEuro areaFinlandGreeceMaltaGermanyFranceBelgiumLuxembourgAustriaItalyEstoniaPolandLatviaHungaryCzech RepublicSloveniaSlovakiaLithuaniaTURKEY34
  35. 35. Source: CBRT, Cetinkaya, March 2013, BRSA(Corporateliabilities,%,GDP)36,80 20 40 60 80 100 120LuxembourgSpainPortugalNetherlandsIrelandDenmarkItalySloveniaAustriaSwedenGreeceFranceLatviaEstoniaTURKEYGermanyFinlandBelgiumUnited KingdomHungaryLithuaniaSlovakiaCzech RepublicPolandModerate Level of Corporate Liabilities35
  36. 36. But Low Savings is a Challenge forTurkey36
  37. 37. (%)1012141618202224262002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Savings-Investment GapSource: Ministry of Development37
  38. 38. Current Account Deficit(12MonthRolling,USDbn)Source: CBRT38-80-60-40-2002040 2002-147102003-147102004-147102005-147102006-147102007-147102008-147102009-147102010-147102011-147102012-147102013-1Current AccountCurrent Account without Energy ImportCurrent Account + Net FDI + Net Errors and Omissions
  39. 39. -505101520252002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Public Savings/GDP Private Savings/GDP(%)Source: Ministry of DevelopmentPrivate Savings Must Rise39
  40. 40. Priorities & Reform AgendaEnhancingCompetitionDeepening CapitalMarketsEducationImproving LaborMarket FlexibilityLocal & RenewableEnergyInfrastructureCombattingShadow EconomyMoving up theValue-ChainNarrowingRegionalDevelopment Gaps40
  41. 41. Reconciliation Process41
  42. 42. GDPSource: TURKSTAT, Medium-Term Program,PwC200220502002$ 230billion2050$ 5 trillion2012$ 786 billion2023$ 2 trillion42
  43. 43. GDP per CapitaSource: TURKSTAT, Medium-Term Program,PwC200220502002$ 3,4922012$10,5042023$ 25,0002050$ 50,00043
  44. 44. Ambitious TargetsSource: IMF, PricewaterhouseCoopers1. USA2. China3. India4. Japan5. Germany6. Russia8. UK7. Brazil9. France10. Italy11. Mexico12. South Korea13. Spain14. Canada15. Indonesia16. TURKEY17. Iran18. Australia19. Taiwan20. Poland2011 (GDP-PPP) 2050Top 10in the WorldTop 3in Europe6th in Europe16th in the World44
  45. 45. Determinants of Long-Term GrowthQuality ofInstitutionsDemographicsProductivity45
  46. 46. Quality of InstitutionsCombattingcorruptionCreating a levelplaying fieldImprovinginternationalcompetitiveness46
  47. 47. Corruption Perceptions Index (2002)(65th among 102 countries)Source: Transparency International 47514303443565964 6573788796020406080100SingaporeHongKongSARTaiwan,ChinaMalaysiaKoreSriLankaChinaThailandTURKEYIndiaPhilippinnesVietnamIndonesia
  48. 48. Corruption Perceptions Index (2012)(54th among 174 countries)Source: Transparency International48514374554 5479 808894105118123020406080100120140SingaporeHongKongSARTaiwan,ChinaKoreTURKEYMalaysiaSriLankaChinaThailandIndiaPhilippinnesIndonesiaVietnam
  49. 49. Within the period of 2005-2012, Turkey has ranked higher than Russia, Argentina and Greece.(71st among 125 countries)Source: World Economic ForumGlobal Competitiveness Index (2005)495814192533454869 71 73 7480020406080SingaporeTaiwan,ChinaHongKongSARKoreMalaysiaThailandIndiaChinaIndonesiaTURKEYPhilippinnesVietnamSriLanka
  50. 50. (43rd among 144 countries)Source: World Economic ForumGlobal Competitiveness Index (2012)Moved up 16 places in a year2nd fastest rising country5029131925293843505965687501020304050607080 SingaporeHongKongSARTaiwan,ChinaKoreMalaysiaChinaThailandTURKEYIndonesiaIndiaPhilippinnesSriLankaVietnam
  51. 51. (84th among 175 countries)Source: World BankEase of Doing Business (2006)51261923 2543848998108121131138020406080100120140SingaporeHongKongThailandKoreMalaysiaTaiwan,ChinaTURKEYSriLankaVietnamChinaPhilippinnesIndonesiaIndia
  52. 52. (71st among 185 countries)Source: World BankEase of Doing Business (2012)521 281216 1871819199128132138020406080100120140SingaporeHongKongKoreMalaysiaTaiwan,ChinaThailandTURKEYSriLankaChinaVietnamIndonesiaIndiaPhilippinnes
  53. 53. Favorable DemographicsSource: EurostatShareof15-24yearsoldinTotalPop.(%)15,816,87 9 11 13 15 17 19 21AndorraItalyGreeceSpainPortugalGermanySloveniaIrelandBulgariaLuxembourgSwitzerlandCroatiaCzech RepublicAustriaLiechtensteinSerbiaHungaryNetherlandsFinlandFranceDenmarkUnited KingdomNorwaySwedenEstoniaUkraineMaltaPolandLatviaSlovakiaMontenegroLithuaniaIcelandMacedoniaGeorgiaChinaTURKEYMoldovaAzerbaijan53
  54. 54. AnnualAveragePopulationGrowthRate(%,2001-11)Growth Rate of Working-Age PopulationSource: OECD, Eurostat, TURKSTAT, UN 542,01,0 1,00,70,300,511,52TURKEY China USA OECD EU 27
  55. 55. REER AppreciationSource: CBRT(2003=100)5565758595105115125135 1989-171990-171991-171992-171993-171994-171995-171996-171997-171998-171999-172000-172001-172002-172003-172004-172005-172006-172007-172008-172009-172010-172011-172012-172013-1Linear Trend55
  56. 56. Thank You!谢谢56

×