Below you'll find the transcript of an interview with H.E. Mr. Murat Salim Esenli, the Ambassador of the Republic of Turkey to China. The interview was conducted by Xie Ning, deputy Editor-in-Chief of China Economic Net.

Xie Ning: Hello, welcome back to China Economic Net. Turkey is a trans-continental Eurasian country. For many Chinese people, Turkey is a favorable tourism destination, and for many Chinese enterprises, Turkey is an ideal place to do business and to invest in. Today, it is a great pleasure for us to invite H.E. Mr. Murat Salim Esenli, the Ambassador of the Republic of Turkey to China to be with us in the studio.

Xie Ning: Hello.

Ambassador: Thank you very much, it's a great pleasure to meet you.

Xie Ning: When premier Wen Jiabao visited Istanbul last October, the two governments announced that by the end of 2015, the trade volume between the two countries will be raised to $50 billion. I think currently the last year the bilateral trade volume was $15.1 billion. So there is still a large discrepancy between the figure and the target. So how should we ensure to fulfill the target in the future?

H.E. Mr. Murat Salim Esenli, the Ambassador of the Republic of Turkey to China. [CE Photo]

Ambassador: Normally, when we are talking about the trade volumes. It's often normal that two countries may have slightly different figures. When we look at our own figures, we realized that the trade volume last year was some where around $20 billion. When we look at the overall trend of bilateral trade volume between Turkey and China, we see a very steady and also a very predictable increase and this increase is varying from year to year naturally. Sometimes it goes up to 25% increase, sometimes 38% increase and occasionally see a drop. But overall if we maintain this current increase in our bilateral trade without doing anything extra, we would be able to reach a volume of $45 billion by 2015. But of course we are not satisfied with what we are doing and we would like to continue increasing the trade volume. Naturally, we have a strong desire to meet targets set by our Prime Minister Recep Tayyip Erdogan and Premier Wen Jiabo during H. E. Wen's historical visit to first Ankara and then to Istanbul.

Xie Ning: So we are confident of fulfilling the target.

Ambassador: Yes, we are confident. Because the overall trend is very encouraging.

Xie Ning: We know, the bilateral trade developed very rapidly, but in the recent years there is a problem of the imbalance of trade. It's become a problem. Last year, China had a trade surplus of $8.7 billion to Turkey. So I think from the Chinese side, we know the concerns from the Turkish side for the imbalance. So how could we both sides to address this problem? How could we reduce the surplus and to maintain a balance?

Ambassador: Before I answer that question, I just would like to, if I may, slightly clarify the figures. As I said in the first part, according to our figures, we managed an export of $2.2 billion worth of goods to China. And the People's Republic of China exported $17 billion worth of goods. So the discrepancy is around $15 billion rather than $8.7 billion. But of course what we're trying to do is just to close this gap in various ways. The tools available to us are our service sectors. We have also various investment opportunities to which we would like to attract investors from the People's Republic of China. And also in the fiscal part of the equation, we would like to have more interaction in the field of our reserves. See what we can do as far as the reserves are concerned, and at the same time we are thinking about creating regional banks in our respective countries. And at the same time we are thinking about having more production lines established in Turkey as well as having more joint ventures with Chinese companies to do infrastructural work, or contractual work, in the third countries. It could be in the Middle East, the North Africa or anywhere else that our services are needed.

Xie Ning: So there're different ways we can reduce the surplus.

Ambassador: Yes, we have these ways and we exploring these ways. And we've already acted in various directions and we start seeing more concrete results.

Xie Ning: We know that Turkey is an emerging economy and also it's a founding member of G20, and Turkey has very unique position in the world economy. In the recent years, there are a number of big Chinese companies such as the Taiyuan Iron & Steel company and also the ZTE and also the HuaWei. They have a lot of projects in Turkey. So I want to know how your government considers the increase of the Chinese investing in your country.

Ambassador: I can be confident to say that we are very pleased to see such reputable Chinese companies are doing work in Turkey. Because normally, if you are in a foreign country that you may not be familiar with, if you see big companies coming then  as a small company you will follow suit. And therefore, for the Huawei's presence, ZTE's presence, the presence of CMEC and CMC, these are all significant developments which we are pro. And at the same time in that list, I would like to include China Railroad Construction Company as well. Because CRCC is busy in working on the field of fast railway connection between Ankara and Istanbul. And at the same time, they are eyeing for more infrastructure projects within the country. And of course having these big reputable, world renowned companies is an indicator of the trustworthiness of the country, because none of these companies that you have mentioned would like to put their money and put their projects in a country that they do not have full trust. So obviously, Turkey enjoys enormous trust among these companies you have listed. And at the same time, they have been in Turkey for quite some years now. And for instance if I take Huawei, Huawei is using Turkey as its home-base to do business with all the central Asian republics extend all the way to Mongolia. And it's doing extensive work in the Middle East and North Africa through Turkey. And therefore we see these big companies doing work and establishing Turkey as a base as a very smart move. It's very logical because of the conveniences and logistical advantages that Turkey provides for these companies. Therefore we are very much interested in attracting more companies from China to Turkey and we assure them that these companies will be treated like Turkish companies. Because in our system, once a foreign company decides to invest in Turkey, after completing the necessary procedures, it is treated like a Turkish company.

Xie Ning: There is an equal treatment.

Ambassador: Absolutely, also application process is very short and the minute they complete all the necessary procedures then they are treated like Turkish companies. So there would not be any difference between a Chinese company and a Turkish company. So Chinese companies would be treated like Turkish companies. This is an important detail that I want to emphasize for any company that is interested in coming to Turkey. And they will benefit from the logistical advantages that Turkey offers. The Chinese companies can export their products to European Union countries, for instance, from Turkey without any import tariffs. The reason why they can do that is because of the Custom Union Agreement which we have concluded with the European Union in 1996. This is an important advantage that I think the Chinese companies ought to be mindful of.

H.E. Mr. Murat Salim Esenli (R), the Ambassador of the Republic of Turkey to China and Xie Ning (L), deputy Editor-in-Chief of China Economic Net, pose during an interview in CE studio recently. [CE Photo]

Xie Ning: I think it also demonstrates the unique position of Turkey between the two continents.

Ambassador: Exactly. Because as we freight any product that is manufactured in China, if it has to be shipped from China to Europe, if you are lucky and the weather conditions permit, by sea, it would take minimum 22 days. But if you have your production line established in Turkey, you can ship your finished products anywhere within a diameter of four-hour flight in about 2 to 4 days. So imagine how much money you can save from logistical point of view by taking Turkey as a production base.

Xie Ning: We know that some big Chinese companies set foot in your land. But how these small and medium-sized enterprises, you know in China there's a large member of small and medium-sized Chinese companies. They also want to have opportunities to invest or to do business outside. So in Turkey do you think is there any opportunity for them?

Ambassador: Certainly, just like big companies, there are enormous opportunities for small medium-sized companies as well. Actually, these small and medium-sized companies are more agile because of their sheer size. They can move fast, they can come in fast and they can conduct business far more rapidly than bigger companies. Because big companies have different strategic approaches while small companies are far more adaptable and I would say, more flexible. But when I look at small and medium-sized companies, I have to tell them that it would be critical for them to find a partner which would be about their size and their mentality and it is not always easy to have the best matchmaking. So I would recommend many of these companies to consult either with us at the Embassy, contact our counselor in our economic section; or through us we would lead them to Turkish Chamber of Commerce (TOBB) in every area. And TOBB is the equivalent of CCPIT in China, so that they could easily find reputable, reliable companies in Turkey. So we could have a good joint venture between small and medium-sized companies in China and small medium-sized companies in Turkey. And it's possible we have done it in the past with a number of other countries. For instance, we have excellent connection like that with the Italian and German companies, so why should we not be able to do the same with the Chinese companies?

Xie Ning: So it's important for small and medium-sized companies to do the consultation before they start their work, to your embassy.

Ambassador: Yes, we are definitely ready to assist these companies as much as possible. And whichever question that they may direct to us, we would be happy to respond. Because small and medium-sized enterprises really hold the key in many cases, so I think it's a good opportunity and potential to have it.

Xie Ning: In order to expand domestic demand in China, Chinese government has put forward a lot of measures to give some subsides or lowering the taxes to the foreign companies. In your opinion, if any Turkish companies want to invest or to do business in China, which province, which region and what sector do you think more suitable for them?

Ambassador: Well, if Chinese companies are interested in investing in Turkey, what we did is just like China. We divided the country into 4 distinct regions. Because some of the regions in Turkey are very developed, we don't want to attract too much investment there. But there are certain places; where there are some investments but we need more of it. There are those which certainly need more intensive investments. The incentives that are provided are much higher, much more attractive for our least-developed parts. But to enlighten your viewers I have to let them know that when you look at China, eastern and southern parts of China are developed and western part is just developing. It is the opposite in Turkey, our western, northwestern parts are very developed and our central and eastern parts are developing. And therefore, we would like to attract more foreign direct investments to these particular regions. In terms of incentives, I must admit we provide free land for the incentive period. We exempt those companies from payment of corporate tax. If they have to obtain credit from banks, we pay for the interest rates for a certain period and also for social security payments that they have to deposit for the employees, we provide them certain assistance. Of course, these are for fixed periods and they can be rather flexible, they can be adjusted based on the volume of investments that's coming in. The bigger investments, more flexibility, the companies would have to contact the Turkish authorities, and in that sense we have the institution which is directly attached to the Prime Minister himself, it's called the Promotion and Investment Agency of the Prime Ministry. And therefore, they have a certain negotiating margin with the companies, and also with the institution we have in Turkey.

Xie Ning: Because we expect the investments is a dual way, a mutual investment, and the Chinese government also encourages to expand the imports from Turkey, and we want to attract more Turkish companies to do business, to establish companies here in China. If one Turkish company wants to invest in China, what sector do you think is more attractive?

Ambassador: I think Turkish companies would be more interested in the information technology; we have our own advantages as far as the automotive industry is concerned. Because the automotive industry is one of our strong points in Turkey, textile likewise, and construction, and in construction we are second in the world list after China. But on information technology, we are slightly behind. And we definitely look at China as an important role model and so far China has done excellent job in making remarkable progress in that field. And we understand that because there are so many big companies, such as Huawei, it's the second largest information technology and communication company in the world. So we don't want to fall too much behind in this new but very competitive industry. And that's why I think IT would be a big field that will be eyed. And the second one, Turkey is a region which is very rich in terms of energy resources. We are surrounded by countries that are rich with petroleum and rich with natural gas and other natural resources. And therefore, we would like to do more cooperative work with the Chinese companies that are in the energy sector. Thirdly, because we have to meet European Union standards as an acceding country, we have to be mindful of environmental conditions, environmental concerns that are attached to fossil fuel. And therefore, we would like to realize a lot of investment in the renewable energy sector which has been growing for some years now.

Xie Ning: The energy sector in your country is also very developed.
 
Ambassador: Yes, we are working on the solar energy and we are working on wind energy, hydropower and of course the thermal and nuclear is something that's up and coming right now. I think that great opportunities for a lot of energy companies in China to do work in Turkey.

Xie Ning: So it's great. You know that China has implemented the strategy of developing the western and the central parts of China in recent years. Historically, the Silk way had connected the western part of China such as Xinjiang, Gansu, and Shaanxi province with Asia and the middle Asia and also furthermost to the European continent. So today what kind of role do you think Turkey can play in helping the western part of China to do foreign trade, to do foreign business with the neighboring countries?

Ambassador: Well, I must say when you look at the way China has developed in the past thirty years. I don't think China needs anybody's help in developing its western part. However, we are very pleased to see that Chinese government is interested in having Turkey in this campaign. And we are very much honored by this kind invitation; this was something that was mentioned during his very historical and very successful visit of the Premier, His Excellency, Wen Jiabao to Turkey. What we would like to obtain is of course the Chinese authorities' necessary assistance that is we would like to have a Turkish industrial zone in the western part of the country, in Xinjiang Uygur Autonomous Region. Because that would not only help us produce things which would be suitable for the domestic Chinese market, but at the same time, it would give us opportunity to tap some of the advantages that China provides. One of the advantages would just like what I said about Chinese companies which established their production lines in Turkey. By establishing our production lines here on the western part of China, we would be able to have a better access to some of our traditional trading partners, namely Kyrgyzstan, Tajikistan, Kazakhstan, Turkmenistan, and Uzbekistan. Because when you look at the map, there is a considerable distance from Turkey to central Asia. But when you're in the western past of China, the distance is much shorter. So you would be able to reduce the cost of transportation. And again we have to recognize the fact that China provides a lot of advantages and a lot of incentives and of course inexpensive labor force, rather than an expensive production cost. So these are things which we are very mindful of and we hope that we would be able to turn it into a concrete project, tangible project and be able to find common ground between China and Turkey. And at the same time of course with the Chinese Government we are working hand in hand in establishing the land-connection between China and the rest of Europe. And this is a cycle, a cycle of something that's very historic like Silk route. But we would like do that with railroads and express ways and this is possible. Once we can establish that, any product that¡®s manufactured in the western part of China would be able to find its way to its desired destination in about 10 or 11 days. So you're transporting things in a shorter period.

Xie Ning: Yes, currently people often use the term of the Eurasia Bridge.

Ambassador: Absolutely, so the connection would be from Beijing to London, you know through Turkey. This is possible.

Xie Ning: Turkey can play a vital role in helping China's western part and middle part to connect outside the world.

Ambassador: Of course, when you look at the Chinese eastern and southern coast line, the connection is through sea lanes. But the inland is slightly isolated because of lack of connection. Of course, there are certain connecting lines, but once we connect the points through the railways or through express ways, then it's going to become far more attractive, it's going to become far more affluent and prosperous.

Xie Ning: Tourism sector in Turkey has experienced a rapid growth in the last 30 or 20 years. And it constitutes a very important part in your economy. Especially for the last 10 years, China and Turkey have made great achievements in tourism cooperation, especially in 2002, the Chinese Government approved Turkey as one of the official tourism destinations and we noticed that the figure of the number of the tourists arriving in Turkey increased rapidly. In 2002, however, only 20, 000 Chinese people arrived in Turkey, but last year it was over 100, 000 people. What do you think about the prospect of the tourism cooperation between the two countries?

Ambassador: I'm particularly optimistic about the tourism prospect between our two countries because when we look at the overall performance of China; China is in the top 10 destinations in the world. And Turkey is also in the top 10. But of course, we vary in figures; China has received somewhere around 55 million foreign tourists, while Turkey has received 28 million in 2010. We are eyeing for 30 million in 2011 as things go the way we are pursuing. Tourism has of course a business side to it, but at the same time, I'm looking at it from a cultural point of view. Because what we would like to do, you know China and Turkey, is to establish strong bondage between our peoples. We want to have a people to people connection, and when you have people to people connection, and then you could easily feel more at ease more confident about the future of your relationship. So we would like to see that kind of strong ties between Chinese people and Turkish people. And that can only be achieved through Chinese people coming and seeing Turkey and observing with their own two eyes what the country is all about and having more Turkish people come and see China in the same manner. And from what I have seen I agree with the statistics you have just shared with me, the figures are increasing rapidly, I'm very pleased about it and after I arrived to take over my job in 2009, one of the first things that I did was to ease the visa procedures. And I believe we are seeing the positive end-results of this process and now we are open to honeymooners and if they are interest in going to Turkey and have their honeymoons in Turkey. We are; of course, open to the idea of large groups and small groups. And the application procedure to obtain visa is very very short. And at the same time, what we have been doing also is to combine Turkey with the other destinations, because it's only natural that the Chinese people when they leave China, because they will travel such a long distance, they don't want to only see single country. They want to take advantage to see more countries. And that's why we manage to match Turkey with Bosnia and Herzegovina, we match Turkey with Macedonia, we matched Turkey in the past with Egypt, but right now we are focusing on more European countries, in the future will be able to do it with Spain, and Czech Republic. So all these things are what we have been doing to make Turkey a little more attractive.

Xie Ning: So you can provide more sounding packages.

Ambassador: Yes, and so far the response has been quite positive and all the Chinese tourists who have been to Turkey and the other destinations have come back rather satisfied. We would like that information to spread out not only by the mass media but by words of mouth. Because sometimes it's more effective if you see someone else doing it or if you hear from a relative or a friend then it becomes more reliable information.

Xie Ning: We know that 2011 it's the 40th anniversary of the two country establishing diplomatic ties. So as you know what kind of activities will be organized for celebrating the 40th anniversary this year, and any of them will be undertaken by your embassy?

Ambassador: We started 2011 with the performances of a big dance group, this dance troupe is called the "Fire of Anatolia" and they have performed in 15 big cites in China. And then, a couple of weeks ago we had a Turkish film festival, and as we approach to August we're going to have some performing arts, we are planning to have also some exhibitions, some conferences. We would like to have high level visits which would buttress all these activities, and at the same time, we are noticing that we have little more interaction between our universities. Because we would like to see intellectual interaction and at the same time as you probably know we have had general elections in Turkey on 12th June, and during that period our normal political activity had slightly decreased because of the campaigning that our political groups conducted. But on the days ahead in the months ahead we would see more activity in the field, and at the same time I would like to share with your viewers that in Shanghai there was an international film festival held and in that film festival a Turkish film, two days ago had won the best prize, the Golden Goblet Prize with a movie called "Hayde Bre". So all these things are contributing enormously to our cultural exchanges, and of course we are taking part in many of the fairs, tourism fairs. We are bringing a lot of important people; journalists from China to Turkey get to see it. So we are focusing on performing arts, music, plastic arts and dancing, whatever you can think of for this anniversary.

Xie Ning: Okay thank you very much, Your Excellency!

Ambassador: I also would like to take this opportunity to congratulate the Communist Party on its 90th Anniversary!

Xie Ning: Thank you very much Mr. Ambassador.

Ambassador: Thank you for having me. It's a pleasure talking to you. Thank you.

(This transcription is written by Yang Haiyang and Li Jingjing, collated by Xie Ning)