20.03.2023 Author: Alexandr Svaranc

Peculiarities of the Turkish-Chinese economic cooperation


Today, almost every country in the world considers China to be an important foreign economic partner. And it’s only natural, given China’s level of scientific, technological, and industrial breakthrough at the turn of the century. In this regard, Turkish-Chinese foreign economic relations are understandable and consistent with Beijing’s target aspirations as part of the “One Belt, One Road” geoeconomic strategy.

China, with its trade turnover of $6.3 trillion in 2022, has used its “One Belt, One Road” strategy not only as a major geo-economic project, the essence of which is to form new alternative communications for exporting goods produced in the Middle Kingdom to foreign markets (primarily to the markets of financially prosperous ASEAN countries, EU and USA), but also to implement a large-scale geopolitical goal of establishing ample control over several regions and weak countries through economic linkage to its goods and investments. China, given the sad experience of the USSR, instead of exporting communist ideology and Soviet arms, has so far been using the export of Chinese goods and loans to its own advantage.

In addition, Beijing’s policy of forming alternative land communications in Eurasia to ensure the effective access of Chinese goods to the European market is hardly compatible with the name “One Belt, One Road.” For the PRC prefers to establish control over a number of transport communication routes with the historical name of “Silk Road,” as well as with new addressees.

Thus, because of the harsh and large-scale anti-Russian economic sanctions from the collective West due to the Russian-Ukrainian crisis, China is forced to look for alternative routes to EU countries instead of routes through the territory of the Russian Federation that are beneficial to Beijing. In this regard, China is focused on the neighboring republics of Central Asia, the Caspian Basin, the South Caucasus countries and Turkey as the most preferable route circumventing Russia. Accordingly, there is no subject of “one route,” for there are “several”…

The advantageous economic and geographic position of modern Turkey (and in the past the Ottoman Empire) at the junction of three continents (Asia, Europe and Africa) traditionally increases the importance of that country in the world trade system and in matters of military strategy. The historical “Silk Road” also passed through the territory of the Ottoman state. At the same time, the section of the route from China to Europe through Turkey passes through a number of economically and militarily weaker countries, which creates an opportunity for Beijing to establish long-term control over local regimes.

However, the relationship between Turkey and China, despite the large distance that separates these countries, is defined not only by economic and trade issues. Historically, the “Turkic ebb and flow” has caused considerable problems for China, the Xinjiang Uyghur Autonomous Region (XUAR) in the northwest of the PRC is its legacy, with a population of over 26 million people, where the Uyghurs comprise slightly less than 50 percent of the total (and together with the Kazakhs, the Kyrgyz, the Mongols and the Tatars, exceed the Turkic population from all the rest).

XUAR is the largest (1,664,897 km²) administrative-territorial unit of modern China; it makes one sixth of the PRC. In addition, this Turkic autonomy borders Turkic countries such as Mongolia, Kazakhstan and Kyrgyzstan, as well as the Indian territory of Ladakh, controlled by pro-Turkish Pakistan. Accordingly, Beijing in the 1990s noted attempts by various Turkish radical centers of pan-Turkic (Panturan) and Islamic orientation, controlled by the MIT (the state intelligence agency of Turkey), to exert ideological and political (actually separatist) influence on the Uyghur population of XUAR.

Such a prospect creates serious domestic political problems of extremism and separatism for China, diverting forces and funds to their severe suppression, which undermines China’s credibility in the international arena.

Xinjiang was conquered by the Chinese in the 1st century and was annexed to the Han Empire, and from the 6th century with the participation of the Turkic Khaganate the active Turkization of the region began. In ancient times, the Great Silk Road also passed through this territory. At different periods of history, Xinjiang was a part of Chinese empires (in particular, Han, Tang and Qing), seceding from them from time to time. In modern times (in particular, in 1928-1942), the territory of Xinjiang corresponded to the Turkic-Islamic Republic of Eastern Turkestan (TIRET), which actively cooperated with the USSR starting from 1933 under the leadership of Sheng Shicai. In fact, regime change in the TIRET occurred due to the Soviet Union’s assistance in suppressing the White Guards’ revolt. However, the local ruler defected to Nazi Germany in 1942, which determined Moscow’s subsequent attitude toward Ürümqi. Particularly, thanks to the Soviet Union, after the Chinese Communist Party defeated the Kuomintang regime in 1949, Xinjiang became part of the PRC and on October 1, 1955, the XUAR was formed as part of the PRC.

In the 1990s, almost all Turkish governments supported Uyghur separatism, and frequently Turkish special services used Uyghur radicals in local conflicts reflecting Turkish interests (including those in the Russian territory of the North Caucasus region). In July 2009 the Ürümqi riots resulted in yet another violent crackdown on local protests by Beijing, which drew emotional criticism from Recep Erdoğan’s government. The latter even described the Chinese government’s treatment of the Uyghurs as genocide, which prompted a strong reaction from Beijing, demanding an apology.

As for the Uyghur population of XUAR, since 2014 Beijing has pursued an active restrictive policy (in particular, including the creation of special camps and the installation of GPS sensors on vehicles). Under the guise of intense construction, Beijing began to massively relocate Han Chinese from other regions of the PRC to the XUAR in order to change the ethnography of the region. In March 2021, the European Parliament imposed sanctions on the PRC for the first time because of the persecution of local Uyghurs.

This policy of the CCP was a response to attempts by external forces, fueled by pan-Turkist and pan-Islamic forces in Turkey, to export ideas of Turkic-Islamic unity and the revival of the Turan Project to the XUAR. Naturally, such harsh practices of Beijing could not but arouse political criticism from the government of Recep Erdoğan, who advocates the interests of the unity of the Turkic world, as well as a number of Western countries (the USA and Europe)—supposedly “defenders of democracy and human rights principles”. However, Ankara soon changed its tactics of relations with Beijing and refused in the public space to interfere in the internal affairs of China.

Assessing the growing economic and military-political power of China, Turkish President Recep Erdoğan decided to establish an active trade and economic partnership with the PRC, and to transfer all issues concerning the XUAR to the sphere of ethno-cultural relations and economic assistance in improving the social situation of the Turkic population of China.

As a result, if in the early 2000s the volume of Sino-Turkish trade was about $1 billion, by 2018 it had already grown to $23 billion. Subsequently, the pandemic and various lockdowns made adjustments to Sino-Turkish trade and economic relations, but now the situation has begun to change towards new activity. In 2021, China, with a share of 11.8% ($32 billion), became Turkey’s largest trade partner in terms of imports of goods.

A third of Turkey’s foreign trade deficit is accounted for by China (more than $55 billion). Beijing began to support major Turkish infrastructure projects. For example, Chinese companies own 65% of the Kumport container terminal in Istanbul, 51% of the Sultan Selim’in Yavuz Bridge over the Bosporus, the China-based Huawei controls over 30% of technology systems on the Turkish market, and in 2016 ZTE acquired 48% of the Turkish company Netaş’s telecommunications facilities. In 2015, Ankara joined China’s New Silk Road project, the Iron Silk Road / Middle Corridor (that is, the route from China to Europe via Turkey). During the implementation of this project, Turkey has already received $5 billion as a profitable investment from the PRC. Since 2016, Beijing and Ankara have been negotiating the construction of a new nuclear power plant in the European part of Turkey.

China lends mainly to energy and transport projects in Turkey, exports production equipment, and invests in the construction market (due to which the cost of square meters in Turkey is growing). All this is a kind of “lifeline” for the Turkish economy (especially during the financial crisis and devaluation of the Turkish lira). Thanks largely to Chinese imports and investments, Turkey’s exports in 2022 reached a historical maximum of $254.2 billion. According to President Recep Tayyip Erdoğan’s plans, Turkey should become one of the world’s top ten exporters of goods. Most of Turkey’s exports of manufacturing equipment are destined to financially prosperous Germany, while Turkish imports from China form the basis of these exports.

All this brings us to the conclusion that China occupies a key place in the structure of Turkey’s trade turnover, allows the Turkish economy to maintain its capacity, creates new prospects for the growth of re-export of goods to EU countries, including the transit of Chinese goods through the Turkmen port of Turkmenbashi, the Caspian Basin and the Baku – Tbilisi – Kars railroad. New projects of Turkish-Chinese transit-communication cooperation include the prospect of reopening the Meghri transport corridor in Armenia, which will significantly reduce the time of traffic of goods from China to Turkey and Europe.

In terms of smoothing out “sharp corners” in China-Turkey relations, the Turkish parliament ratified an extradition agreement in May 2019, allowing Ankara to receive a lucrative loan from Beijing in June of that year amounting to $1 billion. Chinese investments actually help strengthen Turkey’s independent position from Western diktat, as well as keep Recep Erdoğan in power with the concept of reviving a “strong Turkey” in a multipolar world order.

Thus, in its relations with Turkey, China strengthens its status as a major investor and creditor, which allows it to increase its economic expansion and exert political influence over Ankara. Turkey has to reckon with the realities of China’s economic leadership; in Central Asia, the geographical proximity of China with the Turkic republics and the foreign economic dependence of the latter on Beijing should not be discounted (for example, the foreign debt of these countries to China varies from 10 to 60%). Turkey’s transit cooperation with China as part of the Great Silk Road project allows Ankara to integrate the post-Soviet countries of Central Asia and the South Caucasus into a single system of trade and economic relations and communication links.

Despite Turkey’s zealous attitude to the fact of active Iranian-Chinese cooperation (in particular, Beijing’s 25-year agreement with Tehran on investing over $400 billion in energy and infrastructure projects in Iran), Ankara realizes its geographical significance in the Chinese “One Belt, One Road” strategy with a view of spatial access to Europe and the four seas. All this creates the peculiarities of the Turkish-Chinese economic partnership.

Aleksandr SVARANTS, PhD in political science, professor, exclusively for the online magazine “New Eastern Outlook.

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