China’s 2023 Trade and Investment with Turkiye: Development Trends

Posted by

By Emil Avdaliani


China is a leading Asian foreign investor in Turkiye. The two countries have had fruitful bilateral economic and investment ties over years. Ankara signed up for Belt and Road Initiative (BRI) in 2015 and became 23rd biggest recipient of Chinese investment among those states which joined the initiative. As of 2022 China had 1148 registered businesses in Turkiye with a total investment of just over US$1 billion.

Chinese investment in Turkiye varies from sector to sector. For example, the Foreign Economic Relations Board (DEIK) report says that Kumport container port, which operates within the Ambarlı port facilities in Istanbul, is the largest-scale Chinese investment in the country.

The Hunutlu Thermal Power Plant in Adana Yumurtalık, which is fueled by imported coal, is another major Chinese investment. Chinese banks provided financing for the investment of approximately US1.7 billion. The plant, which has been criticized for conflicting with climate targets, has recently become operational. When its construction was completed, China announced that they would no longer build additional thermal power plants overseas.

Chinese e-commerce giant Alibaba has also purchased the shopping site Trendyol for US$728 million. In addition, phone manufacturers such as Huawei, ZTE and Xiaomi have investments in Turkey. Huawei is also poised to build Turkiye’s 5G network in coming years, which increases tensions between Ankara and Washington.

China’s ICBC, the world’s largest bank in terms of market value and total assets, acquired Tekstilbank and entered the Turkish market in May 2015. The Bank of China has been operating in Turkey since 2017.

Chinese banks participated in the financing of the 1915 Çanakkale Bridge and Hunutlu Thermal Power Plant projects. In addition, the Asian Infrastructure Investment Bank (AIIB), established under the leadership of China, provided 600 million dollars of financing to the Salt Lake Natural Gas Storage Project. This was AIIB’s largest funding for a single project to date.

On the other hand, the cancellation of the sale of 51% of the Yavuz Sultan Selim Bridge and the Northern Marmara Motorway in Istanbul to a consortium of six Chinese companies can be considered the most recent development in terms of Beijing investments in Turkey. Negotiations that started in 2019 ended in the second half of 2021 without a deal.

Alibaba plans to invest more than US$1 billion in Turkey, including plans to build a logistics hub, and build Turkey’s largest data center covering an area of 200,000 square meters near Ankara, the Turkish capital.

Yet in comparison with other investor states, the scope of Chinese engagement in Turkiye is significantly lower. Norway and other European states invest more. Thus, the overall Chinese investment into Turkiye remains below what has been usually expected. For instance, in 2013-2020 Turkiye received only 1.31% of Chinese investments and only 0.8% of BRI projects have Turkish engagement.


The bilateral trade has been growing steadily. From 2000 to 2021 the volume rose from nearly US$1 billion to US$32 billion – an exponential growth, which nevertheless remains well short of the stated goal of US$50 billion pledged by both sides in mid-2010s. In 2021 for Turkiye, the Chinese market became one of the top ones for Turkish products putting the country ahead of Russian, and American markets, and becoming second only to the European Union.

In the January-October 2022 period, the top country for Türkiye’s imports was Russia with US$49,6 billion – the development largely caused by the Western sanctions on Russia as a result of the latter’s invasion of Ukraine in February 2022.

Russia was followed by China with US$34,6 billion, Germany with US$19,3 billion, and the US with US$13,2 billion. Turkiye’s main import categories from China consisted of electronic equipment (US$8,68 billion), machinery (US$7,95 billion), iron and steel, plastics and pharmaceutical products worth nearly US$4 billion.

Exports have been one of the main drivers of Turkiye’s economic growth and hit record-high volumes throughout 2022. Yet, a global economic slowdown has affected foreign demand, notably among Turkiye’s largest trade partners, Europe. Export reached $254.2 billion 2022, which marked a 12.9% year-over-year increase. On the other hand, Türkiye’s imports rose 34.3% year-over-year in 2022 to US$364.4 billion, revealed the country’s Trade Ministry data, which means that the overall trade deficit reached a high 138.4% in 2022.

Turkiye’s total exports to China recorded US$290.576 million in November 2022, compared with US$262.967 million in October and overall reached $3.66 billion during 2021, according to the United Nations COMTRADE database on international trade.

Yet the Chinese-Turkish ties have deficiencies too. The trade remains lopsided in favor of China. Turkiye imports nine time more from China creating a significant trade deficit. China is thus the biggest contributor to Turkiye’s account deficit. This also means that the access to the Turkish businesses in China remains largely limited.

Turkey has also failed to transition its export to China from low-value products and natural resources to higher value merchandize. Presently the export mainly consists of marble and travertine, other precious metal ores and concentrates, lead, chromium, copper, iron, zinc, natural borate ores, boron oxides and boric acids.

Uncertain Economic Situation

In many ways 2023 is a decisive year for Turkiye. Erdogan and his government seem to be continuing with the same unorthodox interest cuts leading to ever higher depreciation of lira. Moreover, inflation will average 43.4% in 2023, which is up 2.3 percentage points from last month’s forecast, and 26.4% in 2024. Yet, the inflation seems to peak as for instance, in December it grew only 1.18% – the lowest since August 2021.

This will have a significant impact on the country’s relations with China. Elections in May are to be a critical test for Erdogan and his government as his approval rating has fallen sharply. How will play out on the economic and foreign investment front is difficult to say, but China-Turkiye will remain characterized by mutual pragmatism. One issue, however, which could complicate bilateral ties is China’s treatment of the Uyghurs. Ankara has traditionally abstained from criticizing Beijing, but in early January it has issued a rare critical statement.

Eurasian Connectivity

China and Turkiye also aim at synchronizing their visions for connectivity in Eurasia. For decades both countries had different views. China’s sprawling BRI did not involve the Middle Corridor, the route from Turkiye through the South Caucasus to Central Asia. There were even hints that Turkish and Chinese influence clashed in Azerbaijan, which limited China’s engagement in the expansion of the Middle Corridor. After the outbreak of the war in Ukraine, the situation seems to have changed and Turkiye and China have opened more active talks on cooperation along the corridor. For instance, China-Turkiye Communication Forum was held in September 2022, focusing, among other things, on synergizing the BRI with the Turkiye’s Middle Corridor. Yet, the pace of cooperation remains slow with little practical steps taken so far.

Ankara has increased its outreach to Central Asia already following Azerbaijan’s victory over Armenia in 2020. Effectively the initiator of the Middle Corridor idea back in 2000s, Turkiye is now arguably one of the critical players driving the concept. A series of “block train” transports were initiated in recent years, traversing the corridor. In February 2021, a train reached China from Turkiye’s eastern provinces after nearly twenty days of transit. In April 2022, another train was dispatched via the same route. Turkish President and his Kazakh colleague Kassym-Jomart Tokayev commended during their summit in Ankara in 2022 “the growth of cargo transit via the Baku-Tbilisi-Kars railroad and the East-West Middle Corridor.” Moreover, the two sides “stressed the importance of strengthening coordination between the relevant institutions for the effective and sustainable use of the Middle Corridor.”

Dezan Shira & Associates have 13 offices in China and a partner firm in Turkiye. We can assist Turkish companies into China and Chinese investors into Turkiye. For assistance please email

Emil Avdaliani is a Georgian-based trade analyst. He may be reached at

Related Reading


About Us
Silk Road Briefing is written and produced by Dezan Shira & Associates. As global geopolitics change the way supply chains are developing, we provide regional analysis of the emerging trends and where opportunities for foreign investors are. Our firm provides market research and intelligence for issues affecting all the Belt and Road Initiative countries with assistance from our wide business network of over 100 regional offices. To learn more about how we can help your business evaluate the changing dynamics, email us at or visit