The Future of Turkey: Looking East
In 2013, Turkey angered its NATO partners and signed a $3.4 billion agreement allowing the controversial China Precision Machinery Export-Import Corporation (CPMIEC) to construct Turkey’s first anti-missile defense system.
This past week, Turkey, the only Muslim member of the North Atlantic Treaty Organization (NATO), again rattled its Western partners by considering a Chinese company for its long-range missile system project. Apprehensive U.S. and European members expressed their concerns about the system’s integration into NATO’s security network. Although an official selection has yet to be announced, many are questioning Turkey’s commitment to NATO and predicting an economic realignment towards the East.
Since the beginning of mutual diplomatic relations in 1971, China has slowly but steadfastly risen as Turkey’s third largest trading partner. Turkey, as a developing state in Europe and the Middle East, is eager to expand further east to China—an emerging, but dominant Asian power with the second largest economy in the world. The last twenty years have pointed to a realignment of Turkey’s economic priorities as a result of its shifting national and international economic goals, which have impacted its relationship with the European Union and NATO.
As Turkey’s accession into the EU becomes increasingly less likely, it appears that Turkey is shifting its attention to the solidification of its economic partnerships in the east—particularly with China. Over the last two decades, this gradual change in priorities has led to a growing trade deficit with China, which Turkey has been pressed to resolve. Despite this, Turkey has recently expressed its displeasure with their 1995 EU Customs Union, and has shown interest in a potential SCO (Shanghai Cooperation Organisation) membership. Additionally, Turkey’s work towards greater Foreign Direct Investment (FDI) inflow from China signals its desire to develop a long-term, more stable relationship with East Asian/Eurasian economies. In spite of its overall and Chinese trade deficits, Turkey appears to believe that moving eastward will have greater long-term returns than continuing to rely on the West.
Over the past fifteen years, China-Turkey trade has boomed, rising from “around $1 billion in 2000 to $19.5 billion in 2010,” and further increasing by 45 percent to reach “28.3 billion in 2013.” This exponential growth demonstrates China’s increasing importance as a trade partner to Turkey, and signals a potential departure from Turkey’s generally West- and EU-oriented economic interests.
Current efforts to boost long-term investment between the two countries, in the form of mutual Foreign Direct Investment (FDI), can be seen in Chinese companies’ increased investment and joint production in Turkey’s recent infrastructure projects. In addition to the anti-missile project, Chinese firms worked with Turkish construction corporations to complete a new high-speed train between Istanbul and Ankara in 2014. This has since “[paved] the way for the Chinese companies to enter into other big infrastructure projects in Turkey. Moreover, Turkey’s third proposed nuclear power plant will be developed in cooperation with China’s State Nuclear Power Technology Corporation. And although progress has been made regarding mutual FDI, both countries believe there is room for improvement.
Turkey’s multidimensional economic relationships pose several obstacles, especially with regard to their NATO and EU allies, but also present great opportunities for growth. Turkey is at a crossroads, but ultimately remains the bridge between the East and West. As such, Turkey hopes to defends its controversial decisions and pursue a strategic economic partnership with China, while ostensibly working to preserve its Western relations.