Hakan Fidan’s China Visit; Collaborative Efforts Needed for Improving China-Türkiye Economic Ties

In early June, Turkish top diplomat Hakan Fidan made his first official visit to China since he became Foreign Minister one year ago. He aimed to expand economic cooperation with China, raise the level of bilateral ties, and coordinate positions on regional issues such as the ongoing Israeli-Palestinian conflict. Chinese Foreign Minister Wang Yi visited Türkiye in July 2023 after the latest Turkish presidential election. Minister Fidan’s visit also aimed to further improve bilateral cooperation on various issues, particularly economic ties as his top priority.

China and Türkiye share similar ideas and positions in various global and regional affairs. China has always attached importance to Türkiye’s role as an emerging power in the world. Minister Fidan announced in his speech that both sides will establish an intergovernmental committee, and called for much more investment from China and cooperation in new technology. In addition, He also expressed Türkiye’s interest in joining BRICS, which China supports. Beijing would like to see Ankara to be a member of the BRICS in the near future. In terms of economic ties, we witnessed the expansion of China-Türkiye trade volume in recent years, but the potential and challenges for economic cooperation in trade, investment, and third-party market development have not yet been fully addressed.

First, China-Türkiye trade has developed steadily in past decade, and it is necessary for both sides to address the trade imbalance based on a market approach together. According to the General Administration of Customs of China (GACC), bilateral trade volume amounted to $43.4 billion USD, with a Turkish deficit of $33.3 billion USD in 2023. Türkiye has been complaining about trade imbalance for a long time, however, Beijing doesn’t see it as real problem. Beijing’s points of view, trade imbalance is the natural result of global market operation, China provides the most abundant commodities as a world factory, which are well-priced and popular all over the world. China is in favor of free trade system, its market is open globally, and Beijing is willing to import more Turkish goods, such as agricultural products from Türkiye are popular in China. It is necessary to spend much more effort by Türkiye to reduce the trade imbalance to better understand the Chinese market and to provide much more products needed by Chinese people. It is also important Beijing to support Turkish business world in various areas like Chinese custom.

Second, mutual investment between China and Türkiye stays at a low level, Ankara expects more investment from China and needs to create a much more open and attractive business environment for foreign investment. At the same time, Beijing also welcomes Turkish companies to discover investment opportunities and expand business in the Chinese market, to grow together with China’s new round of economic development. China will provide a new blue market for Turkish companies and a core base for exploring the Asian market. In this regard, the Foreign Economic Board of Turkiye (DEİK) and other institutions could play a significant role in conducting business visits to China, such as participating in the China International Import Expo (CIIE), understanding the Chinese market and discovering investment opportunities through active organization of well-known Turkish business groups. This will not only facilitate the rapid expansion of China-Türkiye trade and investment but will also drive more Turkish SMEs to benefit from the Chinese market.

Third, China and Türkiye should continue to connect and harmonize initiatives of the ‘Belt and Road’ and the ‘Middle Corridor’, jointly improve third-party market cooperation in the fields of transportation and logistics infrastructure, and make greater efforts to build the Trans-Caspian Transport Corridor and benefit partners in Central Asia. At the same time, maritime shipping is still the main channel for international trade and China-Türkiye merchandise transactions. Ankara needs to upgrade its domestic land transport infrastructure to connect the ports of Izmir, Mersin, Antalya, etc., facilizing the export of goods from inner Anatolia to China through ports, Such as agricultural products, minerals and fertilizers, chemicals, etc. In addition, we should not forget other crucial sectors such as civil aviation, and tourism.

Fourth, it is essential for China and Türkiye to enhance advanced manufacturing and new technology cooperation currently, and extend the common industrial chain and supply chain between the two sides. Both sides need to explore much more large-scale cooperation projects, promote many more enterprises to participate in and benefit from new projects, and make greater contributions to global supply chain stability. For example, electric vehicles, new energy, communications, artificial intelligence, nuclear energy and other sectors, are very important for Türkiye’s sustainable economic growth in the future. The above industries are helpful to make Türkiye the leading manufacturing power in the region, and also beneficial to give full play to Türkiye’s geographical advantages in connecting the EU, the Middle East, and Africa, and exporting its products to the surrounding markets. In the long term, excessive protection of industries, such as electric vehicles, is harmful to the sustainable development of the Turkish economy ahead. Ankara should remove barriers to investment in related industries, just like it once welcomed investment in traditional automotive manufacturing from European countries, welcome Chinese electric vehicles and new energy companies with leading technologies to invest in Türkiye.

To strengthen this multifaceted relationship, both nations should emphasize the importance of cultural exchange and people-to-people ties. Initiatives such as student exchange programs, joint academic research projects, and cultural festivals can foster mutual understanding and goodwill. Additionally, tourism should be a key area of focus, leveraging Türkiye’s rich historical sites and China’s vast landscapes to boost economic growth. By increasing direct flights and simplifying visa procedures, both countries can attract more tourists, thereby enhancing bilateral ties. These cultural and tourism exchanges will not only support economic objectives but also build a robust foundation of trust and collaboration, essential for enduring partnerships in trade, technology, and beyond.

Despite various differences, definitely China and Türkiye are willing to further improve development-based relationships to boost economic growth, bilateral economic cooperation has great potential as well as challenges. In the future, we should not just keep an eye on trade imbalance, insufficient mutual investment, and various barriers, and emerging cooperation in the new technology sector remains on the way of China-Türkiye economic ties. In this context, it is increasingly important for China and Türkiye to shape a sustainable industrial chain and supply chain that is beneficial for both sides, which requires a lot of new efforts together.

Authors:

• Zhiqiang Zou, Researcher of Center for Middle Eastern Studies, Fudan University, China.

• Ahmet Faruk Işık, Ph.D. Candidate at School of International Relations and Public Affairs (SIRPA) Shanghai International Studies University, China.