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Dünya Executive - - COVER PAGE - LEYLA ILHAN

Chinese investors and tourists are Turkey’s new best friends. Can China be the new Europe?

China, the second largest country in terms of global trade, has focused on investment­s in logistics, energy, electronic­s, tourism and real estate in the Turkish market. With the entry of two of the country’s largest banks, Bank of China and ICBC, the influx of Chinese companies has accelerate­d, reaching 1,000.

Annually, China invests $120 billion in various countries around the world. Turkey is one of the 65 countries on China’s Belt and Road project, an ambitious trade corridor between the east and west. Foreign Economic Relations Board (DEIK) Turkish-Chinese Business Council President, Murat Kolbasi, said that predominat­ely Europe-based companies operate in Turkey so it is very important that the number of companies coming from China is increasing.

“There is an increase in interest in Turkey because of the ‘Belt and Road’ Project,” Kolbasi said, “and of the 65 countries involved, Turkey is an important bridge between the east and west. Therefore, the Chinese are interested in sectors ranging from tourism to transporta­tion and logistics. They also look at investment­s in areas such as shopping malls and ports, and if they see opportunit­y there, they will invest.”

Kolbasi added that recently Chinese funds have flowed into Turkey to conduct research in these sectors. ICBC’s purchase of Tekstil Bank in 2015 was a watershed moment. China’s third largest bank, Bank of China, started its banking activities in Turkey after it was granted a license for a $300 million capital transfer at the end of 2017. «There has been an increase in the number of Chinese companies coming after the entry of the banks, including ZTE and Huawei, the smart phone and telecom equipment producers. Step by step, more companies are following, in the logistics, electronic­s, solar energy, automotive and subcontrac­ting industries.”

Turkey to become major tourism destinatio­n

There is also an increase in the arrival of Chinese tourists. Kolbasi stated that Wanda Group, one of the largest tourism operators in China, which owns a number of luxury hotel chains, is making its first hotel investment in Istanbul with an agreement with Mar Yapi. And an increase is expected in this area. “There are already 27 weekly flights between China and Turkey,” Kolbasi said. “We expect an increase in the number of Chinese tourists coming this year to 400,000. Last year it was 250,000.” The increase has been assisted by Chinese investment consulting firms that help companies interested in investing in Turkey. “They come and open offices; they study the Turkish market. They do market research and wait for opportunit­ies.”

Chinese eyeing real estate

The internatio­nal real estate investor JLL Global’s Turkey Regional Director, Tarkan Ander, noted that the tensions between the United States and China is increasing the interest of the Chinese in Turkey. He also noted that Chinese investors are looking at office and residentia­l investment. Currently, JLL is in contact with three or four Chinese companies interested in real estate investment­s, either through a fund or through partnershi­ps. “We expect a serious investment before 2020,” Ander said. “Until that time, 5 to 6 large shopping malls are likely to be sold to Chinese

groups.”

Reta l sales ncrease by 166 percent

According to Global Blue Turkey data, foreign visitors coming to Turkey in the first quarter of 2018 spent TRY 350 million on shopping. The Chinese accounted for the highest increase in expenditur­es in the first quarter of this year, 166 percent, over the same period last year. In the first quarter last year, Chinese visitors applied for VAT refunds for about TRY 10 million of retail sales. This figure jumped to TRY 26 million in the same period of this year. The average amount of spending by Chinese tourists has also climbed to TRY 3,238. Each year, 120 million Chinese travel abroad and spend about $300 billion. To increase the number of Chinese tourists coming to Turkey, hotels are expected to give more attention to Chinese cuisine. Due to the rapid growth of Chinese tourists, some hotels add rice to their breakfast menus. In addition, as the Chinese have fewer English speakers, hotels are employing Chinese-speaking staff in order to increase their share from Chinese tourism.

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