Turkey and China aim to raise bilateral trade to $50 billion a year by 2015 from about $17 billion currently under a new “strategic partnership”, the prime ministers of the two countries said.

Both members of the G20 group of rich and developing countries, Turkey and China have two of the fastest growing big economies in the world. Inward-looking just a few decades ago, they are now looking to boost their global influence to reflect their economic muscle.

“We have decided bilaterally to establish a strategic partnership in our relations,” visiting Chinese Premier Wen Jiabao told a news conference with Turkish Prime Minister Tayyip Erdogan in the capital Ankara.

Erdogan said both countries had agreed to use their own currencies, rather than dollars, in bilateral trade and singled out energy cooperation on nuclear power as a promising driver of trade with with China.

“In all of our relations, we have agreed to use the lira and yuan,” Erdogan said, after the two leaders signed eight deals in areas including transportation and trade.

The press conference was held after the Nobel Committee announced the Peace prize had been awarded to jailed Chinese activist Liu Xiaobo, but neither Wen nor Erdogan took questions.

Turkey’s ties with China have been complicated at times because of Beijing’s heavy-handed approach to unrest in Xinjiang, home to China’s Muslim Turkic minority of Uighurs.

Iran Factor
Both Ankara and Beijing have increased commercial ties with Iran, signing deals on oil and gas fields to the frustration of Western powers, who suspect Iran of seeking to build a secret nuclear weapons programme, an allegation that Iran denies.

China reluctantly backed the last round of U.N. sanctions on Iran while Muslim Turkey, along with Brazil, opposed sanctions.

Big powers hope the imposition since June of tougher U.N., U.S. and European sanctions on Iran will persuade it to enter good-faith negotiations and agree to curb nuclear activities.

“China recognises the power and influence of Turkey in the international community and in its region and appreciates its efforts over Iran,” Wen said.

Both China and Turkey say their trade with Iran is legitimate, and high level contacts should be maintained with Iran in order to find a diplomatic solution.

Currently, bilateral trade between Turkey and China is heavily slanted in China’s favour.

In 2009, a year when global trade slumped because of the economic crisis, Turkish exports to China rose 11 percent to $1.6 billion, while imports fell 20 percent to $12.7 billion.

Turkey says it wants to rebalance its trade with China through an increase in Chinese investments in Turkey, tourism from China, joint-ventures in third countries and greater access for Turkish goods in China.

But Timothy Ash, an analyst from Royal Bank of Scotland, said the countries would have to overcome competing interests to make their economic relationship work and flourish.

“While the two sides have strong common strategic interests, the two sides are very much competitors in many spheres of trade these days,” Ash said in a note, citing textiles and electronics as sectors where the countries compete.

“Perhaps the most interesting area of cooperation between the two is transport, as China has recently been looking to invest in transport hubs in the region,” he said, noting that Turkey could face competition from Greece, where China has expressed interest in making direct investments in port facilities.” (Reuters)