Turkey plans to take advantage of its geographic position and an EU customs agreement to attract Chinese investors interested in accessing European markets tariff-free, as it recently did with car manufacturer BYD.
The Chinese electric vehicle giant signed a million-dollar deal with Ankara on Monday to open a factory in western Turkey, promising to create 5,000 jobs, a move that will help it avoid new EU tariffs.
The country, at the crossroads between Europe, the Middle East and Central Asia, is in talks with other Chinese companies, Turkish Industry and Technology Minister Mehmet Fatih Kacir said this week.
“We want to transform Turkey into a production center for the next generation of vehicles,” Kacir told private broadcaster Haberturk.
The minister emphasized his country’s selling points, including being part of the EU customs union and having trade agreements with 28 countries.
“Chinese producers want quick access to international markets,” he said. “Investing in Türkiye offers them that.”
The EU recently imposed additional interim tariffs of up to 38 percent on Chinese EVs, following an investigation that found state subsidies meant they were unfairly undermining European rivals.
But Ankara signed a customs agreement with the EU in 1995 that allows the free flow between them of a range of goods, including cars.
Turkey became one of the main centers of the global automotive industry from the 1970s onwards, when major car manufacturers including Fiat and Renault opened factories in the country – followed by others such as Ford, Toyota and Hyundai .
BYD’s Turkish base will allow the Chinese electric vehicle specialist to bypass EU tariffs raised by Brussels in July and enter European markets.
Under new regulations on investment incentives, BYD will be able to bypass a new 40 percent tariff that Turkey originally imposed on electric vehicle imports. Manufacturers investing in the country will be exempt.
– A new partnership –
At least five other Chinese car makers are now considering opening factories in Turkey, state news agency Anadolu reported.
Turkish manufacturer TOGG and Chinese company Farasis have also partnered to produce EV batteries in Türkiye.
Turkish authorities held numerous meetings with Chinese industrialists last year, the Industry Ministry said.
Turkish Foreign Minister Hakan Fidan visited China in June to seal a new bilateral agreement, calling the countries “engines of Asian wealth”.
His visit to Xinjiang was the first by a senior Turkish official since 2012. The western Chinese province is where Beijing is accused of human rights violations against more than a million Uyghurs and other Muslim minorities.
Turkish President Recep Tayyip Erdogan has previously deplored China’s policy in Xinjiang, calling it “genocide” in 2009.
But Ankara has since moderated its rhetoric – and Fidan reiterated in June the state’s “full support for China’s territorial integrity”.
Former diplomat Gulru Gezer says that, while important, China’s treatment of the Uyghurs, who speak a Turkic language, is not the only issue on Beijing and Ankara’s mutual agenda – and should not harm their relations.
“Fidan’s visit supported this,” she said. “The fact that Beijing allowed Fidan to enter Xinjiang and speak to the population were positive steps.”
But not all experts see it that way.
“Welcoming more Chinese investment could change Turkey’s position on the Uyghur issue and pressure it to implement an extradition agreement,” said Ceren Ergenc, an expert on China-Turkey relations at the Center for European Policy Studies.
“This would have a very negative impact on the security of the Uighur diaspora in Turkey,” which hosts tens of thousands of Uighur refugees.
– ‘Common ground’ –
Many countries, including EU members, want to attract Chinese companies looking to invest in Europe, and Turkey has only started to follow suit, Ergenc said.
But obstacles remain, she said, citing an EU legal framework on foreign subsidies that could make it harder for China to “use Turkey as a springboard into Europe.”
“In the past, Chinese companies considered that the economic situation in Turkey was not reliable enough and preferred Hungary or Poland,” said the researcher.
However, the growing relations between China and Turkey are based on mutual interests, Gezer said.
“Ankara and Beijing share common ground, including a multipolar worldview. Their relations will continue to develop in the near future,” she said.
Erdogan has confirmed his desire to join the Shanghai Cooperation Organization, whose members include China, Russia and Iran, but where Turkey is just a partner.
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