The slowdown in Turkish exports and the gradual ousting of Turkish products by Chinese goods from the markets of Europe, Africa and the Middle East are starting to ring the alarm bells in Ankara.
Reasons for the Decline in the Competitiveness of Turkish Goods
Persistently high inflation in Turkey has given rise to a currency-price crisis and has brought about a sharp increase in production costs. At the same time, the Central Bank’s tight policy of holding the lira exchange rate has made Turkish exports too expensive when converted into hard currency—dollars and euros.
Against this backdrop, the growth of the competitiveness of Turkish goods is slowing down, their presence in foreign markets is shrinking, and Turkey increasingly faces the displacement of its own products from traditional sales destinations. The trade imbalance in China’s favor is particularly noticeable, as China steps up exports and increases pressure on the Turkish domestic market.
In 2025, Turkey’s imports of Chinese goods reached USD 42 billion, whereas in 2020 the figure stood at USD 20 billion. At the same time, Chinese exports to Europe, the Middle East, Africa and Central Asia are growing rapidly, while Turkish exports are slowing down.
Chinese goods, which enjoy state support, enter the Turkish market at relatively low prices and bear down on a whole range of industries—from mechanical engineering to the consumer goods sector.
Thus, in 2023 Turkey imported machinery worth USD 11 billion from China, which accounted for a quarter of the country’s total imports. In this regard, Kutlu Karavelioğlu, President of the Turkish Machinery Exporters’ Association, pinpointed: “We can export expensive equipment to Europe, but at the same time we scarcely have access to the Chinese market, which remains largely closed to us, whereas our market remains widely open.”
In recent years, Turkey has also faced growing competition from Chinese manufacturers of household appliances and electronics. The substantial growth of exports from China jeopardizes the competitiveness of local companies. Burak Önder, President of the Turkish Home Goods Exporters’ Association (EVSİD), states: “The domestic market is no longer price-competitive.”
An especially alarming situation is observed in the footwear industry. In January alone, imports of Chinese footwear rose by an impressive 110%. According to forecasts, by the end of the year the trade deficit in this sector may reach USD 1 billion. The additional customs duties introduced by the Turkish government may prove insufficient. Turkish expert Berke İkten emphasizes that long-term investment in developing domestic production infrastructure is needed to save the industry.
Even in the automotive industry, large Turkish manufacturers are forced to economize by purchasing components in China. The Association of Automotive Parts Manufacturers (TAYSAD) reports that as profits decline, companies increasingly switch to cheaper foreign parts. “Even major assemblers now import parts from East Asia. Meanwhile, medium-sized enterprises are actively stepping up imports of semifinished goods and inexpensive materials from China,” representatives of the association note.
A similar trend can be traced in the steel industry. Veysel Yayan, head of the Turkish Steel Producers’ Association, points to a paradoxical situation: despite rising world steel prices, Chinese products have become 4.5% cheaper, which has triggered an influx of cheap imports.
China is actively crowding Turkey out not only from its domestic market but also from external ones. In the context of China’s overall foreign trade turnover, which by 2025 is projected at more than USD 1.5 trillion, the United States accounts for more than USD 700 billion (11% of total turnover). However, Europe remains China’s main foreign trade partner, with the trade volume of USD 800 billion (12%).
The “trade wars” initiated by former US President D. Trump led to the introduction of harsh tariff restrictions and higher customs duties for the PRC. Although the American market remained the largest for Chinese goods and trade was characterized by a significant surplus in favor of Beijing, China has been forced to actively seek new sales markets for its products.
China’s economic dependence on Western markets—above all the United States and Europe—remains evident. As China Customs notes, loss of access to these markets or its severe restriction as a result of secondary sanctions would inflict unacceptable damage on the economic interests of the PRC.
Under pressure in the American market, China is forced to offset the arising costs by expanding exports to new destinations, which in turn affects the interests of other players, including Turkey. In particular, the PRC is actively relocating assembly capacities to European countries—for example, Hungary and Serbia—seeking to circumvent duties and the consequences of tariff wars. In the Middle East, including Egypt, China is stepping up supplies of its products thanks to investment in logistics and the use of dumping prices.
As the well-known Turkish China expert Nurettin Akçay notes on social media platform X, in order to minimize the negative consequences of the trade confrontation with the United States and maintain its own economic growth, the PRC is redirecting a significant part of its exports to markets traditionally occupied by Turkish goods. This concerns not only Turkey’s domestic market but also external markets with which Ankara has long maintained trade ties.
As a result, Turkey faces the risk of shrinking sales markets for its products because of the growing share of Chinese manufacturers. Akçay confirms this thesis with concrete figures. Thus, in 2025 China’s exports to Algeria grew by 19%, whereas Turkey’s supplies to that country fell by 14%. In Egypt, Chinese exports also increased by 19%, while Turkish exports declined by 2.4%. In the UAE, China supplied goods worth USD 72.9 billion, whereas Turkey supplied USD 9.28 billion. A similar dynamic is observed in EU countries, where China’s exports grew by 8.63%.
Escalating Geo-economic Contradictions: Turkey under Pressure
Growing geo-economic contradictions create new challenges both within Turkey and in the international arena. Inside the country, pressure is mounting on the government and on the economic policy of President Erdoğan, who has moved away from populism in favor of strict monetarism. Turkish producers are demanding protection of the domestic market from the influx of cheap Chinese imports.
However, the attempt to shield their market by raising duties took an unexpected turn: Chinese automakers began building large plants directly in Turkey. For the government, this means an inflow of investment and new jobs. But for local manufacturers it is a huge risk. Chinese companies bring entire supply chains with them, tying the Turkish economy even more closely to the PRC.
The so-called “Middle Corridor,” which Ankara actively developed to strengthen its transit role and influence on the EU, does not bring Turkey the expected geo-economic advantages. The reduction in delivery times for Chinese goods to Europe (from 35–45 to 11 days) only bolsters Beijing’s position, not Ankara’s.
As a result, under the onslaught of Chinese imports, Turkish industry is rapidly losing its positions. Turkey, being a regional power, is unlikely to be able to enter the ranks of world leaders in the foreseeable future.
Alexander Svarants, PhD in Politics, Professor, Specialist in Turkish Studies, Expert on Middle Eastern Countries
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