Although Turkish-Chinese diplomatic relations periodically capture the global agenda due to their fragile aspects, examining the dynamics of economic relations in recent years reveals a different picture. While official Turkish-Chinese relations have been ongoing since 1971, the intensification of mutual economic cooperation dates back to the 2010s. Particularly, with the implementation of China’s Belt and Road Initiative (BRI), which encompasses 140 countries including Türkiye, the number of joint economic collaborations within the framework of international projects between the two countries has increased. Thanks to joint commercial projects carried out in recent years, China has become one of Türkiye’s largest investors and creditors. Chinese multinational companies continue to rapidly invest across various sectors of the Turkish economy. This article systematically analyzes the commercial interests and investments of China, which has become one of the world’s largest investors and creditors, in Türkiye, considering the political-economic factors shaping Turkish-Chinese economic relations.
The rapprochement that began with the strategic cooperation agreement signed between Türkiye and China in October 2010 in Ankara gained further intensity with Türkiye’s accession to the BRI in 2015. Against the backdrop of deteriorating relations with the West, Türkiye continues to deepen its engagement with China. Turkish diplomats, during meetings with their Chinese counterparts, strive to increase China’s interest in investing in Türkiye. Due to its geostrategic location, its proximity to the European Union—a major consumer market for China—and the Middle East, as well as its established industrial tradition and competitive labor force, Türkiye occupies an important position in China’s global economic expansion strategy. It is no coincidence that currently, more than 1,000 Chinese multinational companies operate within Türkiye’s economic environment. China’s investments in Türkiye predominantly encompass sectors such as transportation and logistics, information and communication technologies, financial and banking services, and traditional/green energy industries.
Although China is Türkiye’s second-largest trade partner, Türkiye suffers a disadvantage in the trade balance between the two countries. According to 2023 statistics, Türkiye imported $44.9 billion worth of goods from China, while China purchased only $3.3 billion worth of goods from Türkiye during the same period. Ankara seeks to reduce this deficit by encouraging China to buy more Turkish agricultural products, food items, and other light industry goods. Additionally, attracting more Chinese tourists to Türkiye is among its goals.
For over a decade, Türkiye has engaged in collaborations aimed at strengthening international financial ties with China. For instance, swap agreements signed between the governments of Türkiye and China in 2012 and 2019 to facilitate commercial transactions are among such collaborations. In 2021, a new agreement increased the volume of the swap deal from $2.4 billion to $6 billion. Furthermore, China’s largest state-owned bank, the Industrial and Commercial Bank of China (ICBC), acquired a 75.5% stake in Tekstil Bank in 2015, becoming the first Chinese bank represented in Türkiye’s banking sector.
In recent years, the AKP government has facilitated access for Turkish financial institutions to secure loans from Chinese state banks. For example, in January 2024, Türkiye’s Ziraat Bank secured a $500 million loan from the Export-Import Bank of China. Alongside Ziraat Bank, Vakıf Bank and Türkiye Sınai Kalkınma Bankası (TSKB) also obtained loans amounting to $1.275 billion and $200 million, respectively, from Chinese banks.
Special partnership agreements have also existed between Türkiye’s Akbank and China’s Bank of China since 2012. Moreover, Türkiye’s Garanti Bank has had an office in Shanghai, considered China’s commercial hub, since 1999, and Türkiye İş Bankası has maintained an office there since 2006.
At the same time, Türkiye has been a member of the Asian Infrastructure Investment Bank (AIIB), founded under China’s leadership within the Belt and Road Initiative, since 2016. To date, Türkiye has secured approximately $4.3 billion in loans from this financial institution, making it the second-largest borrower after India. Continuing cooperation in the financial sector, in March 2020, Türkiye’s Wealth Fund signed a Memorandum of Understanding with SINOSURE, one of China’s major insurance companies, to provide up to $5 billion in insurance support for financial activities.
The Turkish government has been cooperating with Chinese corporations for years on projects to develop wireless network technologies. In the field of information and communication technologies (ICT), both public and private companies in Türkiye prioritize strategic partnerships with Huawei, the world’s largest telecommunications company. Since entering Türkiye’s ICT market in 2002, this multinational corporation has provided services such as the installation and modernization of communication equipment and the implementation of various modern technological solutions. For example, in 2017, 2018, and 2019, a series of agreements were reached between Türkiye’s largest mobile operator, Turkcell, and China’s Huawei for the development of next-generation wireless network technologies. Additionally, under a February 2020 agreement, Turkcell acquired the right to use Huawei’s mobile application infrastructure, becoming the first foreign provider outside China to adopt this system. Moreover, in February 2024, the two firms signed three new cooperation memoranda for the development of 5.5G networks, green technologies, and next-generation systems supported by artificial intelligence.
Huawei has also signed agreements with Türkiye’s other leading mobile operators, Türk Telekom and Vodafone Türkiye, at various times for the implementation of innovative digital solutions in Türkiye. Currently, Huawei’s team of 750 engineers operates within Türkiye’s telecommunications infrastructure. Despite facing systematic international sanctions, particularly from the United States and other Western countries, due to its close ties with the Chinese government and military, Huawei continues to expand its services in Türkiye’s ICT sector. Another Chinese company facing Western sanctions, ZTE Corporation, also collaborates with local providers such as Turkcell, Vodafone, Avea, and TTNet.
Apart from Huawei, OPPO, owned by BBK Electronics and the world’s fourth-largest mobile phone manufacturer, became one of the Chinese-origin companies investing in Türkiye by opening a factory in Tuzla, Istanbul, in 2021. Another electronics manufacturer, China’s TCL, established a production facility in Tekirdağ in collaboration with Türkiye’s Arçelik company. Furthermore, Xiaomi, the world’s third-largest smartphone manufacturer after Samsung and Apple, has been producing phones in Türkiye since 2021. Tecno Mobile is another Chinese technology company engaged in smartphone production in Türkiye. It is worth noting that the range of models produced at these facilities is quite limited and generally targets the lower market segment.
Another technological area where China has invested in Türkiye is e-commerce, which has seen rapid global growth in recent years. In 2018, Alibaba, one of the world’s largest digital commerce platforms, acquired a 75% stake in Türkiye’s largest e-commerce company, Trendyol, for $728 million. This move is considered the largest foreign investment in Türkiye’s e-commerce sector. In 2021, Alibaba increased its stake in Trendyol to 86.5% by investing an additional $350 million. By integrating its technological solutions into Trendyol and injecting substantial capital, Alibaba has enabled the company to expand beyond Türkiye’s borders and grow on a regional scale. To date, Alibaba’s investment in Türkiye’s economy amounts to approximately $1.4 billion, and the company has pledged an additional $2 billion investment.
The Turkish government also collaborates with China, which operates the world’s largest high-speed rail network, to develop domestic and international transportation and logistics infrastructure. In recent years, the Erdoğan administration has utilized China’s expertise and financial resources to construct and finance Türkiye’s railway network. For instance, the Istanbul-Ankara high-speed railway line, spanning 533 kilometers and inaugurated in 2014, was built as part of Türkiye-China cooperation. The Chinese government provided $750 million in loans for the construction of this transportation network, making Türkiye the first country outside of China where a high-speed railway project was directly implemented.
In 2018, the Turkish State Railways and China’s Ministry of Transport also agreed on the construction of the Edirne-Kars high-speed railway, which aims to connect Edirne, Türkiye’s westernmost city, to Kars, its easternmost city. However, only a small portion of this large-scale project has been completed to date. Alongside the main line from Edirne-Istanbul-Ankara-Kırıkkale-Yerköy-Sivas-Erzincan-Erzurum-Kars, additional lines connecting Yerköy-Kayseri and Erzincan-Trabzon are planned. The total length of the railway network is estimated to be approximately 2,020 kilometers, making it roughly 2.5 times larger than the 826-kilometer Baku-Tbilisi-Kars railway line. The Edirne-Kars railway project, scheduled for completion by 2035, is expected to cost over $30 billion.
This transportation and communication network, capable of facilitating the rapid transit of large intercontinental cargo volumes, is crucial for the efficient operation of the Central and Western Asia Transport Corridor, a key route of the Belt and Road Initiative (BRI) toward Europe. Moreover, the Edirne-Kars Railway has the potential to strengthen Türkiye’s transit position along the Middle Corridor. Notably, during the G20 Summit held in Antalya in November 2015, China and Türkiye signed a Memorandum of Understanding for integrating the BRI with the Middle Corridor project. Furthermore, at the Belt and Road Forum for International Cooperation held in Beijing in May 2017, additional agreements were signed between the two countries to diversify international transit routes.
In general, transportation and communication projects between China and Türkiye are not limited to intercity high-speed railways or intercontinental transit corridors. Part of the public transportation infrastructure, particularly metro systems in major cities like Ankara, İstanbul, İzmir, and Konya has also been entrusted to Chinese companies. For example, the new-generation automated high-speed trains used on the Kağıthane-Istanbul Airport Metro Line, inaugurated in January 2023 in Istanbul, were manufactured by CRRC Zhuzhou Locomotive, a Chinese electric locomotive producer.
As is well known, one of the key areas globally targeted by Chinese investments is international commercial ports, and Türkiye is no exception. In 2015, China acquired approximately 65% of Istanbul’s Kumport Container Terminal, one of Türkiye’s three largest seaports, for $950 million. Kumport is one of China’s major seaports in Europe under the Belt and Road Initiative (BRI). The port is managed by COSCO Shipping, a Chinese holding with the world’s largest commercial shipping fleet, operating in 40 countries. Additionally, prolonged negotiations were held for a consortium of Chinese companies to purchase a 51% stake in the Yavuz Sultan Selim Bridge, also known as Türkiye’s third bridge, for $688.5 million, but no agreement was reached. Notably, in January 2018, the Industrial and Commercial Bank of China (ICBC) approved a $2.7 billion loan to finance the Yavuz Sultan Selim Bridge and the Northern Marmara Highway. These infrastructure projects are considered strategically significant for the BRI and the Middle Corridor.
In recent years, China has also stood out globally for its investments in green energy, extending cooperation to Türkiye in this field. One of China’s top five energy companies, State Power Investment Corporation (SPIC), completed the 10.875 MW Adıyaman Photovoltaic Project in Adıyaman, Türkiye, in 2017. In addition to green energy, the construction of facilities powered by traditional energy sources also forms the foundation of bilateral cooperation. For instance, Chinese companies won tenders for two coal-fired thermal power plants planned for construction in Adana and Konya. The Adana Emba Hunutlu Thermal Power Plant, operational since 2022 with an investment of $1.7 billion and a capacity of 1,320 MW, is considered China’s largest direct foreign investment in Türkiye. For the 500 MW Ilgın Thermal Power Plant in Konya, ICBC provided a $570 million loan. Beyond these projects, Türkiye’s first boron processing plant, specializing in boron mineral refinement, was constructed in Bandırma, Balıkesir, in 2019 by China Machinery Engineering Corporation, at a cost of $70 million.
In addition to power plants, the Tuz Gölü Gas Storage Facility, considered the world’s largest underground gas storage project under construction, is being built by China’s Tianchen Engineering Corporation. Currently, this facility, owned by Türkiye’s state-run BOTAŞ, has a storage capacity of 1 billion cubic meters of natural gas and serves as a key strategic site for Türkiye’s gas reserves. Efforts are underway to increase the facility’s total capacity to 5.4 billion cubic meters in the coming years. For comparison, the total capacity of Azerbaijan’s underground gas storage facilities is 3.5 billion cubic meters. To meet its growing energy needs, Türkiye has also shown interest in cooperating with China to construct a nuclear power plant. Although a cooperation agreement was signed in 2016 for the construction of a four-reactor plant in the Thrace region, no concrete progress has been made on the project. Lastly, it should be noted that in May 2024, a new Memorandum of Understanding was signed in Beijing to strengthen energy cooperation between Türkiye and China.
Speaking of energy, a new era of cooperation between Türkiye and China in the electric vehicle sector, one of the key components of the green energy world, began a few months ago. In July 2024, China’s largest electric vehicle manufacturer, BYD, reached an agreement with the Turkish government to build a new factory that will produce 200,000 electric and hybrid cars. The factory, expected to cost $1 billion, is planned to open in Türkiye’s western province of Manisa by 2026. Given the increasing competition in the global electric vehicle market and the growing trade barriers imposed by the United States and the European Union on Chinese electric car imports, China’s decision to establish a plant in Türkiye can be considered a strategic move. Türkiye’s membership in the EU Customs Union likely played a critical role in this decision. Notably, BYD’s plant in Türkiye will be the Chinese conglomerate’s second production facility in Europe after Hungary.
Following BYD’s initiative, other Chinese automakers such as SWM, Skywell, Chery, DFSK, and MG have also expressed interest in investing in Türkiye’s automotive industry. Prior to BYD, in June 2023, Skyworth Holdings, the producer of Skywell electric vehicles, signed an agreement with Türkiye’s Ulubaşlar Group to establish a battery production facility. Additionally, EVE Energy, one of the world’s largest lithium-ion battery manufacturers, announced a partnership with Aksa Jeneratör, part of Kazancı Holding, to produce battery modules, cabinets, containers, and energy storage systems in Türkiye.
Faced with serious macroeconomic challenges such as the socio-economic impacts of the COVID-19 pandemic, excessive government spending, increasing external debt, high inflation, depletion of currency reserves, and periodic depreciation of the Turkish lira against foreign currencies, Türkiye has been seeking foreign direct investment and loans to address its current account deficit and meet external debt obligations. This includes securing financial resources from countries such as China, Qatar, the UAE, and Saudi Arabia. Additionally, political and economic conflicts with the U.S. and Europe during the AKP era have pushed Ankara to seek alternative trade partners, investors, and creditors outside the West.
China’s long-term, low-interest loans, minimal commercial demands compared to Western financial institutions, and technical and labor support in infrastructure development have strengthened Türkiye’s international cooperation with China. However, China’s preference for exclusively employing its own companies and workforce in projects has led to delays or cancellations in some cases. Additionally, Türkiye’s ongoing economic crisis over the past few years has put Chinese investments in local manufacturing at risk, negatively impacting current and future partnerships.
Nevertheless, large-scale Chinese investments, which are part of its strategy to enhance its global economic influence, have contributed, albeit modestly, to Türkiye’s technological advancement and economic diversification. Türkiye’s aim to diversify its trade partners and China’s search for countries with large consumer markets, strategic roles in the Belt and Road Initiative, and significant need for foreign capital have driven the growing Ankara-Beijing ties. Besides importing technology from China, Türkiye also accesses financial resources for infrastructure projects through joint platforms. One of the main reasons behind Ankara’s recent interest in joining BRICS, an organization co-founded by China to promote economic cooperation, lies in economic factors and commercial interests.
Vusal Guliyev is the Head of Shanghai Office at AZEGLOB Consulting Group, a Policy Expert at the Topchubashov Center, and an Associate Research Fellow at the China Studies Center of Khazar University. He is a graduate of Shanghai International Studies University.
