Beijing discusses "cooperation in supply chains"

Representatives of the Turkish and Chinese business worlds discussed how the two countries can develop ties within global production and supply chains for sustainable economic cooperation and balanced trade at the 2nd Turkey-China Business Conference held in Beijing. A panel titled “Global Supply Chains and Turkey-China Cooperation” was held at the conference, which was held in partnership with the Foreign Economic Relations Council (DEİK), the Turkish Industrialists’ and Businessmen’s Association (TÜSİAD), and the China Council for the Promotion of International Trade (CCPIT). Representatives of 3 Turkish and 3 Chinese companies, including Beko, Çimtaş, Softech, as well as ZTE, FiberHome, and the China Coal Group, expressed their views on bilateral trade, production, and supply chains at the panel. In his speech at the panel, Beko China Marketing and Product Director Onur Türkmen stated that the Chinese economy has grown rapidly over the years, shifting from labor-intensive production to technology-intensive production, and has become a center capable of producing high-tech products. Türkmen, who pointed out that consumption has also started to increase in the country and that customer demand for high-quality products has increased, said, "The middle class in China is expected to reach 700 million by 2025. If this population were a country, it would be the third largest in the world." Türkmen stated that Turkey's exports to China are 3.2 billion dollars annually and that this figure, which corresponds to 1.3 percent of total exports, remains at a very small level. Noting that these figures actually indicate potential, Türkmen stated that Turkish companies should continue to turn to China. "Which China will you enter?" Emphasizing that companies entering the Chinese market should understand the country's conditions well, Onur Türkmen said, "We will enter China, okay, but which China you will enter is also important. Right now, it is minus 5 degrees here (Beijing). If you go a little further north, the ice festival will start in Harbin, minus 30 degrees. If you fly four hours south, you can sunbathe in Haynan, tropical climate... Therefore, where in China and in which climate you sell goods is very important." Emphasizing that 54 percent of the world e-commerce market is in China, and that this creates a very important window of opportunity, Türkmen said, "In the past, companies entering China would say, 'How will we sell our product here, how will we reach the channel?' There were reservations. You can work directly with e-commerce platforms such as T-Mall, Pinduoduo and Jing Dong. In addition, there are companies that act as intermediaries for you to work with these platforms. Logistics is now much easier and transparent, and payment systems are also digital. There is an opening in your supply chain." Stating that it is very important to follow consumption trends in China and that he believes this could open a new window of opportunity for Turkey, Türkmen continued his words as follows: "For example, food. China's agricultural product imports in 2022 are $98.2 billion and this market is growing rapidly. The food and beverage sector was among the growing markets in consumer spending during the '11.11' shopping festival period, also known as 'Singles' Day' this year. While the Chinese market grew by 5 percent in the first 9 months, the food and beverage sector grew by 19 percent. I think a country like Turkey, which is among the world's top 10 agricultural producers, has a great chance here." Automotive and green energy Türkmen pointed out that Turkey and China could cooperate in industrial and supply chains in areas where both countries have production capacity, such as automotive and green energy equipment, and noted the following: "In the automotive sector, China currently has a production capacity of 45 million vehicles, and when you add the extra shifts, its production capacity is 50 million. The demand in the domestic market is around 25-26 million, and in addition to this, they export 5-6 million, and they are currently the world's largest exporter. Turkey is one of the largest automotive centers in Europe. We produce 1.3 million cars per year. I believe that if Chinese companies make this investment in Turkey, which is right next to Europe, instead of establishing this excess capacity in China, they will have a great chance to both do business and open up to the world with their brands." Türkmen, who drew attention to the fact that a similar cooperation could also be realized in the production of renewable energy equipment, reminded that China produces 80 percent of the world's solar panels and 60 percent of wind turbines, and that Turkey is the largest solar panel producer in Europe, and noted that the partnerships that Chinese companies will establish with Turkish companies through knowledge and technology transfer offer great opportunities to open up to world markets with brands. Localized supply chain Gu Shinyu, Technology Coordinator (CTO) of Chinese ZTE Turkey, which operates in the field of telecommunications infrastructure in Turkey, also emphasized that the main point of optimizing the China-Turkey supply chain system is to strengthen localized management. Underlining that a localized supply chain can help reduce dependency on international chains and reduce the risks that transmission disruptions and instability caused by global events will cause, Gu said, "Establishing a more stable and flexible supply chain between China and Turkey can contribute to the continuation of production under unpredictable conditions." Gu said that localizing production and supply will allow companies to quickly adapt their production plans and meet market demand more flexibly, adding, "China and Turkey can jointly establish local production bases that respond quickly to better adapt to market changes, reduce inventory pressure, and increase production efficiency. This can also contribute to the joint development of production capacity and innovation capabilities through technology and experience sharing." Gu emphasized that when ZTE Turkey acquired NETAŞ in 2017, it established an efficient sales and service team with the Turkish company and preserved human capital in cooperation with the Turkish side, and that the company carried out many projects in partnership with Türk Telekom and Turkcell in the construction of fixed networks and cell networks, and entered into cooperation in many areas from 5G base stations to microsatellites.