China, Turkey Relations Strained After EV Investment Fallout
China and Turkey spent years strengthening a strategic partnership built on trade, investment and access to European markets. The sudden collapse of a flagship $1 billion Chinese investment now threatens to slow one of Beijing’s most important economic relationships in the region. For years, China and Turkey have maintained a cordial and strategic relationship, with Turkey’s access to the EU…
China and Turkey enjoyed a burgeoning strategic partnership forged through trade, investment, and access to European markets. However, a recent setback could threaten this crucial economic relationship. China's electric vehicle (EV) giant, BYD Company Ltd, abruptly abandoned its $1 billion planned EV manufacturing plant in Manisa, Turkey, shifting production to Hungary instead.
This decision comes amid heightened tensions between the two nations. Turkey's access to the EU Customs Union made it an attractive destination for Chinese investments, with Chinese goods moving into the EU without extra customs fees. The sudden collapse of the BYD investment has cast a shadow over this strategic alliance, leaving Ankara humiliated.
In response, Beijing launched a charm offensive and major propaganda campaign in Turkey, organizing a trip to Xinjiang for Turkish journalists, while downplaying human rights concerns. Experts warn that Turkey will likely continue its balancing act between Beijing and Western allies due to its worsening economic struggles, including high inflation and depleted international reserves.
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