2024-07-22 12:06:09
Maybe all the lights are on his provocative fiesta Recep Tayyip Erdogan in occupied northern Nicosia on the occasion of the 50th anniversary of the invasion of Cyprusbut it seems that the Turkish President is concerned with much wider issues than the Cypriot.
Within two weeks, Erdogan first attended the Shanghai Cooperation Organization (SCO) meeting in Astana and then the NATO summit in Washington.
In Washington, Erdogan made it clear that the Turkey rejects escalation against Russia. “The prospect of a direct conflict between the NATO and Russia is worrying,” said the Turkish President.
A few days earlier, Erdogan was in Astana for the Shanghai Cooperation Organization meeting and received a warm welcome. He met both with the Russian President, Vladimir Putinas well as with the Chinese President, Xi Jinpingand both pledged to further strengthen ties with Turkey.
The Turkish Foreign Minister, Hakan Fidan, was last month in China to talk about Turkey’s possible accession to the BRICS countries.
After all, trade between Turkey and the countries of the Shanghai Cooperation Organization is growing rapidly. This is largely due to the sanctions imposed by the West on many SCO countries. Of course, the EU is by far Ankara’s most important trading partner, accounting for almost a third of its trade. By contrast, Turkey accounts for 3.6% of the EU’s total trade. But Russia supplies Turkey with almost half of its natural gas needs and a quarter of its oil imports.
China’s window to the EU
Turkey has a Customs Union with the EU, which makes the country an attractive point for avoiding tariffs or sanctions. For example, BYD, China’s largest electric vehicle maker, announced a $1 billion deal to build a factory in Turkey as part of its overseas expansion, with a 150,000-vehicle-a-year capacity plant. The investment is expected to create around 5,000 new jobs, with production expected to start in late 2026. This plant is expected to attract further Chinese investment.
Apparently BYD’s motivation is to circumvent potential EU trade tariffs by making use of the Customs Union with Turkey.
Ahead of the SCO summit, Turkish TV channel TRT World pointed out that Turkish exports to SCO countries have increased by 85% in the past five years – from $14.1 billion in 2019 to $26.1 billion in 2023 .
The same is true for Turkish imports: Turkey’s imports from SCO member countries also reached $106.3 billion last year, roughly twice as much as $55.6 billion in 2019.
The Shanghai Cooperation Organization countries’ share of Turkey’s total exports last year was still only 10%.
Chinese investments
Ankara is making intensive efforts to attract foreign investment as the Turkish economy faces serious problems. This is where China comes into play with its vast economic resources.
Turkey’s favorable geographical position could turn the country into a “production hub” focusing – at least for now – on duty-free exports to European countries.
However, China still has a long way to go: In 2022, Chinese direct investment in Turkey reached $1.7 billion. So far, the EU still accounts for 59% of foreign direct investment in Turkey.
Race for nuclear power plants
However, Turkey continues talks with Russia for a second nuclear power plant after Akuyu, and with China for a third.
The Russian nuclear power company Rosatom financed and built the Akuyu power plant, which, once fully operational, will meet around 10% of Turkey’s energy needs. However, due to US sanctions, the Russians have recently faced delays.
At the same time, the US is expected to put more pressure on Ankara to comply with Washington’s guidelines.
The situation is precarious because NATO would probably not tolerate Turkey being a member of the SCO.
In addition, the US House of Representatives is promoting a bill that would require the US government to sanction Rosatom and its subsidiaries, as well as anyone involved in significant transactions with Rosatom. This would have a significant impact on Turkey’s first and so far only nuclear power plant.
Distances from the US
At the same time, the US is trying to pressure Turkey to enter into contracts with American companies, although there are several problems with this.
Moreover, US nuclear technology would hardly reduce Turkey’s dependence on nuclear fuel from Russia or China. The change in Turkey’s stance is likely to upset Washington.
A search of the US Treasury website shows a whopping 259 sanctions against Turkish individuals or entities. This does not reflect well on relations within NATO at a time when Turkey is going through its worst economic crisis in two decades. But there is no guarantee that Turkey will remain a NATO member unconditionally and forever. Unless, with the expected arrival of Trump in the White House and his good relationship with Erdogan, the Turkish pendulum swings again.
Interestingly, however, China has also recently begun to consider defense cooperation with Turkey.
At the same time – as polls show – the Turkish public has now moved away from the EU and the US and is looking more towards the east:
A 2022 poll by the Turkish company Gezici found that 72.8% of respondents support good relations with Russia. But nearly 90% see the United States as an enemy country.
Recent polls from the Pew Research Center to mark NATO’s 75th anniversary don’t paint such a bleak picture, but Turks still have the second-lowest approval rating for the alliance among members, at just 42 percent.