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China’s emergence as an increasingly proactive and assertive global actor over the last decade, especially with the Belt and Road Initiative (BRI), has been one of the most critical factors shaping the emerging post-liberal international order. The intensification of great power competition between the United States and China has accelerated uncertainties in global affairs, resulting in fundamental structural challenges to the post-war liberal international order. The emergence of new power centres, such as China and other major BRICS economies, has severely undermined the West’s dominance, especially after the 2008 global financial crisis, during which the global power shifts accelerated in favour of China. In the current international order, characterized as a “multiplex world” by some scholars, Beijing norms significantly challenge Washington norms in the “age of hybridity” or “in-betweenness.” A crucial dimension in the present context is that the new political – economic landscape of the emerging post-liberal international order offers greater manoeuvring space for emerging powers across the globe. An increasing number of states, including Turkey, are positioned “in-between” the great power rivalries, with the United States-led liberal democracies on the one hand and China and Russia on the other, with Turkey aspiring for “strategic autonomy” in its foreign policy. In this context, the present article focuses on the political economy of China – Turkey relations over the last decade.
Turkey is a significant emerging power with regional and global middle power credentials, with its institutionalized relationship with the West through NATO and the EU and its expanding sphere of influence in neighbouring regions such as the Middle East, the Balkans, and beyond. During the early years of today’s ruling Justice and Development Party (Adalet ve Kalkınma Partisi, AKP), Turkey experienced significant reforms in the economic and democratization realms under the influence of the EU and key Washington institutions, such as the IMF and the World Bank. However, since the early 2010s, Turkey has been repositioning itself internationally by expanding its engagements with the Global South. This has happened in parallel with step-by-step authoritarianization under the AKP government, an integral part of the rise of right-wing populism globally.
The fragmented and increasingly multipolar global order facilitated the ascending phase of China-Turkey relations, effectively starting with the Strategic Partnership Agreement signed between the two countries in 2010, followed by Turkey’s BRI membership in 2015, and evolving expectations from the Asia Infrastructure and Investment Bank (AIIB). Since then, bilateral relations between the two countries have expanded rapidly through economic cooperation, social exchange, and cultural dialogue. While examining the new momentum in China-Turkey relations over the last period, it is possible to identify three critical turning points.
The first was the third electoral victory of the AKP in 2011, the beginning of a new period in Turkish political economy. Turkey’s inclination towards “state capitalism” exercised through Beijing norms became more profound during this period. The Turkish economy has gradually shifted from the "social and regulatory neo-liberalism" associated with the post-Washington consensus norms in the early years of the AKP era to an increasingly hybrid model of authoritarian state capitalism in the later stages. This is crucial in the current context as China and Russia seem to have had a significant influence on Turkey's new developmentalist approach. With the shift to the presidential system in 2018, the new hybrid model emerged and quickly gained prominence, demonstrating the increasing impact of "Beijing norms."
The second critical turning point was the July 15th failed coup d’état in Turkey in 2016. President Recep Tayyip Erdoğan was especially outspoken in his denunciations of the West after the failed coup attempt, especially of the US for failing to oppose the coup and for not extraditing Fethullah Gülen, the man who is believed to have planned the coup and who has been living in the US since 1999, and of the EU for granting asylum to Gülenists in Europe. Following the coup, Erdoğan made the following statement in one of his speeches: “I am calling on the United States: what kind of strategic partners are we?” questioning the long-standing historical partnership between Turkey and the United States. These developments led to a substantial deterioration in Turkey’s relations with the US and the major European powers and accelerated the shift towards the Russia-China axis.
The third major turning point was associated with the financial breakdown and consecutive currency crises Turkey has been experiencing since the transition to the new presidential regime in the summer of 2018. The financial fluctuations had both internal and external factors. From the domestic front, the overly authoritarian presidential system, centralized decision-making process, and the significant erosion of investor confidence and loss of autonomy from important regulatory institutions like the Central Bank have led to a significant outflow of foreign capital. Additionally, bilateral relations between the US and Turkey have deteriorated in foreign policy, culminating in the US imposing economic sanctions on Turkey. The COVID-19 pandemic in 2020 aggravated the economic situation even further. By the end of 2023, the Turkish lira’s value against the USD had fallen by more than 600% over about five years. To overcome its economic crisis, Turkey has been searching for new avenues of finance as alternatives to Western institutions, which has provided additional momentum to the bilateral China-Turkey relationship. Turkey has become the second largest recipient, after India, of AIIB loans since 2016, with about 4.3 billion USD approved for projects in Turkey as of February 2024.
Economic figures indicate a sharp increase in Chinese FDI in Turkey following Turkey’s signing of the BRI agreement in 2015, from 82 million USD before the agreement to 624 million the following year, with the latest FDI figure from 2022 being 1.7 billion, a peak of Chinese FDI in Turkey, according to the Turkish Central Bank. However, China is not one of Turkey’s top sources of inward FDI, in which the EU continues to occupy a dominant role, with 29.13 billion USD FDI from the Netherlands alone in 2022. Japan and Singapore’s FDI in Turkey is far more significant than China’s, with 4.7 billion USD and 11.39 billion USD in 2022, respectively.
In terms of trade, Turkey is an import-dependent country. However, the asymmetry between imports and exports with China is much more critical than the overall trade. In 2023, Turkey's imports from China were about 45 billion USD. In contrast, Turkey’s exports to China were only 3.3 billion USD – a striking asymmetry compared to other trade partners, according to the Turkish Statistical Institute. Comparatively, about 30% (106 billion USD) of Turkey’s imports and 40% (104 billion USD) of exports in 2023 are with the EU's 27 member states. A close inspection of the data points towards the following pattern: Turkey’s trade and investment relations with the West and the EU continue to be much more important despite the growing ties with China. Furthermore, Turkey’s trade relations with China remain profoundly asymmetrical in sharp contrast to trade with the EU. Turkey runs more significant trade deficits with non-Western superpowers – China and Russia – than the EU and the United States.
In retrospect, the growing economic interaction between China and Turkey has fundamental political implications, best reflected in Turkey’s position regarding the Uyghurs over the last decade, against whom China is committing crimes against humanity, according to a UN assessment. China’s maltreatment of Uyghur and other Turkic populations in the Uyghur region has gained significant attention from the global community, with parliamentary resolutions in at least nine countries condemning the atrocities and a few dozen expressing concerns at various platforms, including the UN. However, Turkey, home to a sizable Uyghur diaspora and known for its ethno-cultural and religious ties with Uyghurs, has remained relatively silent. In 2009, in the aftermath of the 5th July incident in Urumqi, the current President Recep Tayyip Erdoğan, then Prime Minister, called out China’s treatment of Uyghurs as “almost a genocide.” However, contrasting with that previous proactive stance, Turkish official discourse has been confined to “conveying sensitivity” about the Uyghur issue behind closed doors, where a formal extradition treaty with China is still awaiting ratification in the Turkish parliament. This is mainly because of the anticipation of economic gains and the possibility of strong reactions and diplomatic pressure from China. Whether the Turkish governing elite will and/or can resist China's pressure and be more vocal on the Uyghur issue is likely to be determined by the future dynamics of the domestic political economy and Turkey’s geopolitical orientation.
In sum, China-Turkey relations over the last decade can best be described as a partnership with significant limitations. The rise of China with global projects such as BRI and AIIB have promised a considerable opportunity for Turkey, an aspiring middle power, seeking autonomy in its foreign policy by diversifying its options and diverging from its traditional allies. The divide between the “West and the Rest” may increasingly be relevant in the next decade. Turkey finds itself at a critical juncture to make a radical choice for its foreign policy orientation, in determining its principal anchor in decision making.
As China has started to play an active role in the Middle East, as reflected in its recent efforts to normalize Saudi-Iran diplomatic relations and advocate for the rights of Palestinians at the UN, Turkey has also attempted to illustrate its unique position in regional conflicts as a mediator between Russia and Ukraine and, more recently, Israel and Palestine. There is no doubt that China-Turkey relations will be accelerated in the context of economic cooperation and as an emerging alignment within the Global South in the post-liberal international order. However, the high asymmetry in trade, unmet expectations in terms of FDI, and political distrust centring on the Uyghur issue will continue to be the main limitations in further enhancement of bilateral relations. Turkey's structural embeddedness in the West can both be an opportunity and an obstacle in China-Turkey bilateral relations, depending on the ability of Turkish and Chinese policymakers to effectively instrumentalize the institutionalized alliance of Turkey and the West.
