Wednesday, 25 April 2018
$100bln of Foreign Trade will Satiate Logistics Sector

Underlining that the foreign trade volume between Turkey and China increased by 24 times in the last decade rendered logistics a new field of profit, Ibrahim Burkay, Turkish Exporters Assembly China Country Coordinator, says that the 100-billion dollars of objective of Turkey for the year 2023 will bring important opportunities for the logistics companies.

ibrahim_burkayBurkay underlines that the strong partnerships of the Turkish Logistics firms with the companies like China Ocean Shipping, China Shipping and China National Foreign Trade Transportation will bring contributions to the solutions of the problems.

You accompanied to Prime Minister Recep Tayyip Erdoğan in his China trip. What are your observations regarding the trip?
In our trip we had together with our Prime Minister, we held discussions that are important for Turkey. As you know, China is a country that made direct investments as of 2011 with the value of over 320 billion dollars worldwide. Turkey is one of the rising stars of the world and it intends to increase the common activities with China. China and Turkey are the two countries that have the strongest construction companies in the world. Similarly, both of the countries are extremely successful in the textiles and ready-made clothing industries. In the transport, telecommunication and energy areas, important cooperation activities will be established between our country and China. Both countries understand the importance of each other better and better, day by day.   

Target was set to increase the foreign trade volume between Turkey and China to $100 bln, which is $25 bln, in 10 years’ period of time. How would you evaluate this target?
Having had a substantial development in the last 20 years’ time, China has become one of the super powers in the world economy and politics. According to its 1 billion 330 million population and purchase power, as well as Gross Domestic Income of more than 11.3 trillion dollars, China is the second biggest economy of the world and it realized approximately 1 trillion 900 billion dollars of export and 1 trillion 742 billion dollars of important in 2011 and it had approximately 158 billion dollars of foreign trade surplus. In addition, it is seen that, with China’s 2011 total approximately 72 billion dollars of textile and 170 billion dollars of ready-made garment volume, it is still the number one in these sectors.
When we scrutinize the foreign trade volume between Turkey and People’s Republic of China, we see that it increased each year. In 2011, Turkey’s export to China was $2.5 bln, import from China was $21.6 billion.
In 2001, the foreign trade volume between China and Turkey was about 1 billion dollars. In 2011, this value became 24 billion dollars. So, we see that it increased 24 times. In 2023, total 100 billion dollars foreign trade volume might be reached.
The biggest insufficiency in China regarding substructure is in transport and communication. In China, as of today, 502 active airports are available. Providing services in 2011 to 77.4 million passengers, Beijing International Airport is the second biggest airport in the world.
In China, there are more than 2000 ports, 130 of which are open for international transport. As of 2011, 8 of the busiest 20 ports in the world are in China. In addition, China has the largest high speed train network thanks to 6,300 kilometres of high speed train network. However, in China, the present transport infrastructure can only meet 60% of the demand. The ports and the railroads are unable to meet the demands completely. Airway transportation lacks material, high technology, and trained personnel.

Subsequent to the crisis experienced in Europe, the political instability in the Middle East changed the route of export. For the exporters, primarily China, the Far East markets became favourite markets. How such developments and the increase targeted in the volume of trade between the two countries will reflect to the logistics sector?
When we go over the last few years’ period, we see that our country had a better performance than the developed countries. After the problems encountered in the European Union that is the most important market of our leading sectors such as automotive or textiles, the importance of the alternative markets was started to be understood better. In this context, the fact  that how much we were right to constitute strategic partnerships in  these countries by way of the introduction-marketing and market access activities we have been successfully carrying out in the Eurasia and Asian Pacific regions came to the ground once again. One of the fundamental issues we attach importance in this period was to direct the upper segment product shares handed over by the countries like Italy, Belgium, France, Portugal, and Spain that are seriously losing their market shares in the international markets to Turkey.
Regarding the share of the logistics sector in the Gross Domestic Income, we see that China has a high ratio of 18%. With the foreign trade volume that increases day by day, the logistics sector is becoming a new field of profit. Establishing strong partnerships by the Turkish logistics firms with the leading firms like China Ocean Shipping, China Shipping and China National Foreign Trade Transportation will ensure that the problems will be solved more rapidly. For example, as the sector, we had an important achievement in the home textiles field. We increased the home textiles export of Turkey to China 8 times in the last 4 years. We ensured this by realizing national participation organization regularly and by establishing strong cooperation with our Chinese partners. This success of us has become a good example for the exporters of our country.  

Centralized management in the logistics increases productivity

What are the problems experienced on the Turkey-China line in the logistics field presently for the exporters and your recommendations of solutions regarding them?
Centralization of the logistics operations by means of utilizing the specific software technologies will increase the productivity. In this way, tracking and consolidating data will be much easier and free of errors. In addition, the deliveries will be faster and faster as much as we simplify the export and import procedures in the logistics field. We are thinking that it is necessary to approve the import documents through the agreements to be made and to ensure that the customs transactions are cleared without losing time. Moreover, the customs taxes resulting from the logistics services must be reduced. In parallel with the arrangements of the World Trade Organization, China reduced the daily tariff rates to a significant extent. But, compared to APEC and the EU, the rates are still high.

In the commercial relations between Turkey-China, what are your mid and long term expectations and your demands from the logistics sector?
It is very clear that the commercial relations between Turkey and China will grow each year. The volume of the mutual foreign trade will advance from 25 billion dollars to 100 billion dollars. Both countries have a lot to learn from each other in this sense.
For our logistics sector, there are opportunities especially in the port towns in China’s Eastern coastal region in the topics over specific units, like express delivery, special logistics services, sea freight, and directions. In China’s logistics sector, these areas attract foreign investment most.  Most suitable centres for such investments are Ningbo, Shenzhen, Hong Kong, and Shanghai.
In addition, we see that the European Union has concentrated on the China market. In this sense, Turkey has a luckier position in terms of distances and cultural grounds. Our foreign trade will be stronger as much as we run the logistics sector healthily.  Moreover, the success of other sectors will be directly affected.
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