Türkiye puts its best foot forward to charm Chinese firms

ISTANBUL

Türkiye plans to draw on its geographical position and an EU customs deal to entice Chinese investors keen to access European markets tariff-free, as it recently just did with carmaker BYD.

The Chinese electric vehicle giant signed a billion-dollar deal with Ankara on July 8 to open a plant in western Türkiye, promising to create 5,000 jobs, a move that will help it dodge new EU tariffs.

The country, at the crossroads between Europe, the Middle East and Central Asia, is in talks with other Chinese companies, Industry and Technology Minister Mehmet Fatih Kacır said last week.

"We want to transform Türkiye into a production center for the next generation of vehicles," Kacır told private broadcaster Habertürk.

The minister emphasised his country's selling points, including being part of the EU's customs union and having trade agreements with 28 countries.

"Chinese producers want rapid access to international markets," he said. "Investing in Türkiye offers them that."

The EU recently slapped additional provisional tariffs of up to 38 percent on Chinese EVs following an investigation that concluded state subsidies meant they were unfairly undermining European rivals.

But Ankara struck a customs deal with the EU in 1995 that enables the free flow between them of a number of goods, notably cars.

Türkiye became one of the leading centers of the world's automobile industry starting in the 1970s, when major carmakers including Fiat and Renault opened plants there, with others like Ford, Toyota and Hyundai following.

BYD's Turkish base will allow the Chinese EV specialist to bypass EU tariffs upped by Brussels in July, and enter European markets.

At least five other Chinese carmakers are now considering opening plants in Türkiye, state-owned news agency Anadolu reported.

Turkish manufacturer TOGG and Chinese firm Farasis have also partnered up to produce EV batteries in Türkiye.

Turkish officials have held numerous meetings with Chinese industrialists in the last year, the industry ministry said.

Türkiye's Foreign Minister Hakan Fidan visited China in June to seal a new bilateral deal, calling the countries "drivers of Asian wealth."

Many countries, including EU members, want to attract Chinese firms looking to invest in Europe, and Türkiyw has only just started following suit, said Ceren Ergenç, an expert of China-Türkiye relations at the Center for European Policy Studies.

But obstacles remain, she said, citing an EU legal framework on foreign subsidies that could make it harder for China to "use Türkiye as a springboard for Europe."

"In the past, Chinese companies considered that the economic situation in Türkiye was not reliable enough, and preferred Hungary or Poland," the researcher said.

However, China and Türkiye's warming relations are based on mutual interests, Gezer said.

“Their relations will continue to develop in the foreseeable future," she said.