Is China fooling Türkiye in trade?

Türkiye’s trade relationship with China has evolved into a complex and often troubling dynamic. While celebratory headlines highlight a 51% increase in exports to China, the underlying details reveal a more concerning picture.

As the notorious trade imbalance continues to grow year after year, China’s imports from Türkiye primarily consist of raw materials rather than end products, to the disadvantage of Türkiye.

Zoom in: raw materials vs. processed goods

China’s demand from Türkiye is heavily skewed toward raw materials and commodities. There has been a significant increase in the export of mining and chemical raw materials, with mining product exports doubling and chemical raw material exports increasing fivefold. Textile raw material exports have also seen a considerable rise.

Rank	Products	2020	2021	2022	Share (%) 2022	Change (%) 2021-2022
1	Marble and travertine	538,201	612,164	416,152	12.7	-32
2	Chromium ores and concentrates	98,474	191,008	250,478	7.6	31.1
3	Lead ores and concentrates	153,179	194,903	166,571	5.1	-14.5
4	Copper ores and concentrates	90,028	86,957	150,973	4.6	73.6
5	Precious metal ores and concentrates	174,997	153,850	145,027	4.4	-5.7
6	Refined copper and copper alloys (unwrought)	162,809	164,806	127,266	3.9	-22.8
7	Petroleum oils and bituminous minerals derived oils	22,722	25,617	126,073	3.8	392.1
8	Natural borates and their concentrates	58,614	88,519	110,935	3.4	25.3
9	Nickel mattes, nickel oxide sinters, and other products	62,542	55,968	95,553	2.9	70.7
10	Iron ores and concentrates	83,254	215,014	88,833	2.7	-58.7

However, when it comes to processed goods, the situation is less encouraging. Exports of finished products have significantly declined. For example, exports of ready-made clothing, climate control products and electronic goods have all been cut in half.

Rank	Products	2020	2021	2022	Share (%) 2022	Change (%) 2021-2022
1	Telephone sets and other communication devices	2,485,006	2,681,079	2,254,300	5.5	-15.9
2	Automatic data processing machines	1,725,276	2,076,391	2,083,735	5.0	0.4
3	Stainless steel flat-rolled products	208,358	498,771	968,250	2.3	94.1
4	Diodes, transistors, and similar semiconductor devices	280,252	443,975	965,128	2.3	117.4
5	Polycarboxylic acids and their derivatives	55,758	347,064	859,374	2.1	147.6
6	Synthetic filament yarns	480,741	671,960	818,982	2.0	21.9
7	Other alloy steel flat-rolled products	129,127	506,731	729,527	1.8	44.0
8	Flat-rolled products of iron or non-alloy steel	573	170,894	728,296	1.8	326.2
9	Polyacetals, other polyethers, epoxide resins, polycarbonates, etc.	129,031	370,924	700,010	1.7	88.7
10	Electrical transformers and static converters	388,688	466,369	659,607	1.6	41.4

Between the lines: It seems that China is strategically sourcing raw materials from Türkiye while reducing its imports of Turkish finished goods, reinforcing the idea that they prefer to control the production process themselves. As a major manufacturing hub close to Western markets, Africa, and the Middle East, Türkiye is at a disadvantage because its primary focus is on exporting end products to foreign markets.

Trade imbalance in Türkiye-China relations

China has consistently been a key trade partner for Türkiye, particularly on the import side. While China ranks 19th in Türkiye’s export markets, it holds a much more significant position in terms of imports, indicating a persistent trade imbalance.

Türkiye’s exports to China have remained relatively modest over the decade, ranging from approximately $2.3 billion to $3.7 billion. In contrast, China has been one of Türkiye’s top import partners, reflecting China’s role as a global manufacturing hub. The high level of imports relative to exports underscores Türkiye’s reliance on Chinese goods, particularly in sectors like electronics, machinery, and textiles.

Year	Türkiye’s exports to China (USD Thousands)	Türkiye’s imports from China (USD Thousands)	Trade balance (USD Thousands)
2013	3,755,649	25,260,751	-21,505,102
2014	2,970,633	25,732,865	-22,762,232
2015	2,500,618	25,283,734	-22,783,116
2016	2,378,538	24,852,474	-22,473,936
2017	3,037,675	23,753,644	-20,715,969
2018	3,078,644	21,506,001	-18,427,357
2019	2,726,078	19,128,160	-16,402,082
2020	2,865,866	23,041,354	-20,175,488
2021	3,662,748	32,238,052	-28,575,304
2022	3,281,335	41,354,561	-38,073,226
2023	3,306,084	45,047,968	-41,741,884

Is Türkiye’s trade with China creating a risky dependency?

China’s global strategy is clear: they are stockpiling raw materials and agricultural products from around the world, including from Türkiye. This approach allows them to present the narrative of increasing imports from trade-deficit countries while minimizing economic disruption.

Türkiye’s reliance on exporting raw materials while importing finished products from China could have long-term economic consequences, including increased trade deficits and dependency on Chinese goods. The current trend suggests that Türkiye’s trade relationship with China is increasingly unbalanced, with potential risks for the Turkish economy.

So, how did Türkiye find solution for growing Chinese dominance?

The Turkish Ministry of Trade has decided to impose an additional customs duty on petrol and hybrid passenger cars imported from China to boost domestic production and reduce the trade deficit.

According to the decision published in the Official Gazette, imported vehicles originating from China are subject to an additional customs duty of ‘40% of the import value or $7,000 per unit, whichever is higher.’

• Ankara’s tariff policy pays off: Chinese electric vehicle (EV) manufacturer BYD, which surpassed Elon Musk’s Tesla in the fourth quarter of 2023 to become the world’s top seller of EVs, plans to build a $1 billion plant in the western province of Manisa.

What’s more: Chinese battery giant Ganfeng Lithium is set to make a $500 million investment in Türkiye through a strategic partnership with Yigit Aku.

• The venture will apply for incentives under Türkiye’s HIT-30 Program, which supports high-priority technology projects with specialized solutions and incentives.
• Ganfeng Lithium Group, valued at $26 billion and listed on the Hong Kong Stock Exchange, signed a Strategic Cooperation Framework Agreement with Yigit Aku, a leading Turkish lead-acid battery manufacturer.

General overview: Türkiye’s top 20 export, import partners

Rank	Country	2023 (r)	2022	2021	2020	2019
1	Germany	21,083,354	21,141,783	19,311,023	15,978,698	16,617,244
2	USA	14,879,654	16,885,325	14,720,364	10,182,966	8,970,658
3	Iraq	12,759,358	13,750,276	11,125,650	9,142,047	10,223,292
4	United Kingdom	12,463,116	13,004,798	13,703,695	11,235,582	11,278,615
5	Italy	12,372,779	12,386,045	11,473,021	8,082,560	9,753,018
6	Russia	10,906,585	9,342,796	5,774,392	4,506,681	4,152,137
7	France	10,287,542	9,534,619	9,111,137	7,195,168	7,945,607
8	Spain	9,783,655	9,654,318	9,619,642	6,683,488	8,138,744
9	UAE	8,572,809	5,252,673	5,493,362	2,828,043	3,627,237
10	Netherlands	7,857,412	8,026,254	6,764,786	5,195,120	5,761,921
11	Romania	6,951,714	6,947,484	5,175,021	3,893,981	4,073,075
12	Poland	5,955,208	5,417,452	4,673,825	3,474,726	3,448,829
13	Israel	5,434,606	7,032,339	6,355,775	4,704,088	4,463,820
14	Belgium	4,365,608	4,778,506	4,899,300	3,634,672	3,396,193
15	Bulgaria	4,226,695	4,721,645	3,953,436	2,634,444	2,668,230
16	Greece	4,171,507	3,302,681	3,118,900	1,799,836	2,245,318
17	Ukraine	3,443,800	3,059,409	2,900,545	2,090,327	2,156,454
18	Egypt	3,352,651	4,556,656	4,513,693	3,136,160	3,508,791
19	China	3,306,084	3,281,335	3,662,748	2,865,866	2,726,078
20	Libya	3,257,338	2,840,774	2,771,261	1,653,076	2,069,497

Rank	Country	2023 (r)	2022	2021	2020	2019
1	Russia	45,599,587	58,848,948	28,959,361	17,829,309	23,115,236
2	China	45,047,968	41,354,561	32,238,052	23,041,354	19,128,160
3	Germany	28,687,775	24,033,074	21,726,305	21,732,759	19,280,399
4	Switzerland	19,905,177	15,335,897	3,054,869	7,770,804	3,374,800
5	USA	15,779,725	15,228,078	13,147,623	11,524,951	11,847,373
6	Italy	14,994,186	14,082,252	11,562,694	9,199,617	9,349,593
7	France	11,547,686	9,429,702	7,931,536	6,988,074	6,760,064
8	UAE	11,530,205	4,470,951	2,442,660	5,603,801	4,388,996
9	Spain	9,507,243	7,004,013	6,311,611	5,039,428	4,446,113
10	South Korea	9,487,978	9,004,399	7,597,023	5,734,268	5,777,022
11	India	7,932,008	10,697,077	7,936,146	4,830,115	6,635,217
12	United Kingdom	6,523,078	5,904,556	5,558,194	5,582,666	5,638,296
13	Japan	5,466,847	4,640,815	4,389,292	3,743,373	3,647,962
14	Poland	5,074,133	4,294,369	3,635,826	3,005,108	2,603,243
15	Netherlands	4,420,492	4,497,087	4,508,587	3,628,586	3,202,985
16	Belgium	4,302,475	4,420,585	5,628,385	3,716,088	3,229,280
17	Brazil	4,139,999	4,830,904	3,827,073	3,228,347	2,655,109
18	Malaysia	4,139,184	4,288,755	3,098,059	1,989,963	1,847,831
19	Czech Republic	3,831,471	2,895,417	2,713,597	2,746,268	2,338,350
20	Ukraine	3,691,707	4,455,394	4,524,675	2,590,375	2,725,419