Wednesday, August 5, 2015

Xi and Erdogan focus on economic ties, shelve Uighur row

SINAN TAVSAN, Nikkei Staff Writer

NIKKEI ASIAN REVIEW -August 3, 2015

ISTANBUL -- Turkish President Recep Tayyip Erdogan on Thursday completed a three-day state visit to China. For Erdogan, the trip was a high-wire act. Part of his mission was to convince Chinese companies that they should get involved in ambitious transportation, energy and other large-scale infrastructure projects in Turkey. But he was also there to ask that China respect the human rights of the country's ethnic Turkic population. These ethnic Turkics, or Uighurs, reside in the Xinjiang Uighur Autonomous Region, in western China, where discontent with Beijing has often bubbled to the surface. Turkey is in a bit of a tight spot. In terms of gross domestic product, its economy averaged 3.4% growth from 2007 to 2014. That is a big drop from the 7.2% average growth it experienced from 2002 to 2006. It also mirrors the European Union's slow economy over a similar time span. Turkey, the crossroads between Asia and Europe, now wants to enhance its relations with the nations to its east. And, as it happens, China would like to engineer what it calls a new Silk Road Economic Belt so that its exports can more easily make their way to Europe. While in China, Erdogan hailed China's plan and made sure to point out that Turkey would be a willing participant.
But he also had to address the Uighur situation. "It seems they have found a middle way for now regarding the Uighurs" said Selcuk Colakoglu, head of the Asia-Pacific Research Center, a think tank based in Ankara, an academic unit of Ankara based think tank USAK. "The visit was instrumental for rebuilding trust between parties and repairing damaged ties." Of course, Colakoglu continued, "the Uighur problem is the soft underbelly of Turkey-China relations." Turkey and China have been in a diplomatic tiff over the Uighur situation since the end of June. The Turkish foreign ministry at the time summoned Chinese ambassador Yu Hongyang to convey "deep concern" regarding media reports that China had banned Uighurs from fasting and observing other religious rites during the Muslim holy month of Ramadan. Then last month, Thailand sent a number of Uighur refugees trying to make their way to Turkey back to China against their will.

The Turkish Foreign Ministry issued a statement saying it "deplores the act of the government of Thailand." But the situation only escalated. More than 200 people, mostly belonging to an Uighur-related association in Turkey, stormed the Thai consulate in Istanbul and vandalized the building. Since then, East Asian tourists and residents in Turkey have come under increasing amounts of harassment by Turkish people who assume their targets are Chinese. The usually outspoken Erdogan had to tip-toe around the issue to strike the appropriate tone and not draw the ire of China ahead of his key visit. "Allegations that our brothers living in the Xinjiang Uighur Autonomous Region of the PRC are under pressure has caused sensitivity in our public opinion," Erdogan said during a fast-breaking dinner reception for foreign ambassadors in Turkey, in July. "Especially, as a considerable number of the images and reports circulating in the media have either been [fabrications] or wrong, opening the door to exploitation." Erdogan was more diplomatic than he had been in 2009, when violent clashes between Han Chinese and Uighurs led to scores of deaths. Erdogan labeled the killings a "genocide," drawing harsh criticism from China.  In April 2012, following then Vice President Xi Jinping's high-profile visit to Turkey, Erdogan became Turkey's first prime minister to visit Xinjiang. He took a stroll through the city center and chatted with Uighurs in Turkish before visiting Beijing, where he struck a conciliatory tone on the issue. During last week's visit, Erdogan received China Islam Society members, including Uighur and Hui Muslims, in Beijing. Turkish presidential sources told the official Anatolia News Agency that China welcomed the meeting. Chinese officials even expressed their content with the comments Erdogan had made on the Uighur situation before his visit. "China allowing such a meeting shows there is a mutual understanding between the countries," said Dr. Altay Atli of the Bogazici University Asian Studies Center. "They want to solve their Uighur problem. After the tensions the two countries have experienced in the last months, now mutual trust has been restored, for the time being." Sino-Turkish relations have significantly advanced during the past couple of years. Chinese companies are now eager to play a larger role in Turkey's massive infrastructure and defense projects, including high speed trains, nuclear plants and missile defense systems. After wrapping up talks with Erdogan on July 28, Xi attended a Turkey-China business forum the next day. The conference drew close to 300 businessmen from both countries. Erdogan was also on hand. Pundits are suggesting that Xi showing up at the symposium shows that China attaches importance to its relations with Turkey. At the forum, Xi said China wants to cooperate in future high-speed rail projects in Turkey and "play an active role" in the country's planned third nuclear power plant. China was in the running to develop Turkey's second nuclear power plant, but a Japanese-French consortium ended up winning the contract. During his speech, Erdogan also welcomed Chinese involvement in developing his country's next nuclear power plant. Turkish officials have told the Nikkei Asian Review that Westinghouse of the U.S. and China's State Nuclear Power Technology Corporation in June presented a joint pre-feasibility report to Turkey's energy ministry. In the report, they proposed building four reactors that could be either Westinghouse's pressurized water reactor AP 1000 model or China's CAP 1400 model, which is based on the AP 1000. Turkey is currently evaluating the report. On the defense front, the two leaders agreed to continue negotiating a deal in which Turkey would buy a multibillion-dollar long-range air and missile defense system from China, Turkish sources said. Negotiations will also continue on joint production and technology transfers, according to the sources.  The China Precision Machinery Export-Import Corporation in 2013 had been announced as having won the contract for the defense system with a bid of $3.4 billion. But the result drew a negative reaction from Turkey's NATO allies. Negotiations have been continuing since then, with European and U.S. companies now also in the running. Erdogan noted that Turkey is running a trade deficit of around $22 billion with China. He made the remark during the business forum and urged China to "close this gap with Chinese investments." During their talks, Erdogan and Xi set a long-term target for trade between the two countries to reach an annual $100 billion. Erdogan also proposed that the two countries use their own currencies when trading between each other. The nations have other economic links. Turkey became a founding member of the China-kick-started Asian Infrastructure Investment Bank. While in Beijing, Erdogan said Turkey provided $2.6 billion of the bank's initial capital, for which it received voting rights of 2.48 percent. That makes Turkey the bank's 11th largest shareholder. On another front, the Industrial and Commercial Bank of China in April completed regulatory approval for acquiring 75% percent of Turkey's small-cap Tekstilbank. Tekstilbank in May issued a statement saying, "Reviving the silk road and Turkey becoming a founding member of AIIB have laid a foundation of future infrastructure agreements between China and Turkey." In Turkish politics, the Justice and Development Party, known as the AKP, of which Erdogan is among the leading founders, in June lost its majority for the first time in nearly 13 years. Should coalition talks fail, Turkey faces an early election, possibly at the end of November. The AKP is currently playing the nationalism card as it tries to regain its single party majority. But if the Uighur situation flares up again, the AKP and Erdogan might be put in a squeeze. Making public statements in favor of the Uighurs would certainly play well at home but would also anger China. Bogazici University's Atli admitted that such a scenario could play out "in theory, but it would be highly unlikely so soon after such a high-profile visit." While in China, Erdogan and Xi signed several agreements, among them a memorandum of understanding on establishing a cooperation committee at the deputy prime ministerial level. They also signed a pact calling for the two countries to mutually encourage and protect investments between them.

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