Is Trump Pushing Turkey into China’s Arms?

Over the weekend, the Turkish currency lira lost 20 percent of its value, giving a big shock to the emerging economy. On Friday, every US dollar was exchanged for 6.5 Turkish liras. The Turkish currency had already fallen more than 40% in the past year.

Additionally, economic reports suggest that Turkey's account deficit (CAD) has risen to 6.5 percent of the gross domestic production (GDP), echoing the situation the country suffered in 2012. The CAD is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the goods and services it exports.

The Turkish politicians have cited the Washington sanctions on Ankara and the tariffs imposed on the Turkish steel and aluminum exports to the US as reasons causing the national currency to experience the plunge. On August 8, the Turkish government sent a top economic delegation to the US to talk to the White House for an agreement on the situation. Sources familiar with the negotiations said the talks failed raising the question that if the widening gaps with the West will trigger Turkey's about-face towards the East.

Turkey hoped that with the presidency of Donald Trump, who promised to mend ties with Washington’s traditional allies across the world, the US will further take into the consideration the Turkish interests as it designs its new regional strategy. But Trump’s assumption of power at the White House proved frustrating to the Turkish leaders. The sticking points with Washington– ranging from call for extradition of US-based Fethullah Gulen whom Ankara accuses of masterminding 2016 failed coup , US support for the Syrian Kurds, Washington’s opposition to Ankara’s pro-Muslim Brotherhood policy, purchase of Russian S-400 missile defense system to canceling delivery of an ordered air defense systems and F-35 fighter jets– have now broadened to include economic war as the American leader wages his trade war against the world. The economists warn that if the present situation endures, the Turkish economy could suffer even more consequences.

President Recep Tayyip Erdogan, addressing the economic conditions of Turkey and the tensions with the US, wrote an article on the New York Times on Thursday, warning that the decades-long alliance between Turkey and the US is nearing its end, adding that under the tense ties it is impossible for the NATO allies to continue cooperation. He threatened that Ankara may seek new friends and allies. A day before publishing the article on the American newspaper, Erdogan, speaking to his supporters, maintained that Turkey is considering strengthening ties with China, Russia, and Iran as alternative partners to the US.

The threat to review ties with Washington and the West as a whole can materialize in the political and business relations with the Eastern powers like China soon, though Erdogan may not rethink his military and security collaboration with the West in the near future.

China comes second after Germany as Turkey’s largest trade partner. The Asian economic heavyweight is the biggest source of the Turkish imports. The Chinese investors are heavily present in the Turkish economy. At the time being, the Turkish economy yearns for foreign investment, something giving Beijing a golden chance to invest and thus realize its strategy of economic foothold gain in the world’s strategically sensitive parts in accordance with China’s strategic vision 2025. In December 2011, Mehmet Simsek, the former Turkish deputy prime minister, met with his Chinese counterpart Wang Yang in Beijing to discuss Chinese investment in the Turkish infrastructural projects. The meeting was part of Ankara’s diplomatic efforts over the past years to expand economic partnership with Beijing.

COSCO Pacific, a subsidiary of the state-owned Chinese shipping company COSCO Group, now holds a 65-percent stake in Turkey’s third largest container terminal Kumport Terminal. Partnership with Turkey in the Red Sea, Aegean Sea, and the Mediterranean Sea ports is extremely tempting for China. China’s Asia Infrastructure Investment Bank (AIIB), provides the funding for TANAP (Trans-Anatolia Natural Gas Pipeline) energy pipeline project that sends gas from Azerbaijan to Europe through Turkey and Georgia. China’s telecommunications giant ZTE acquired 48.8 percent of the Turkish telecommunications company Netas in December 2016. China also entered the club of countries which signed contracts with the Ankara to construct nuclear power plants in the country.

In 2016, president Erdogan lashed out at Europe for setting hurdles ahead of his country’s membership in the European Union, saying that he will stop EU accession efforts and instead will seek Shanghai Cooperation Organization as an alternative to the European bloc. Turkey was allowed by the leading SCO members China and Russia to chair SCO Energy Club in 2017.

Erdogan in May 2017 headed a large economic delegation to Beijing to take part in “Belt and Road Summit” which discussed the expansion of trade through the ancient Silk Road. In the opening ceremony, Erdogan praised the China-led Silk Road revival project as largely helping to fight terrorism, promising full support by Turkey for the initiative. At the time, Ankara and Beijing signed an agreement on extradition, ground transportation, and cultural cooperation.

Despite the growing China-Turkey partnership, mainly prompted by the recent years’ US approach to Turkey, some political issues represent obstacles to their closer ties. One main issue is Beijing’s concerns about the Uyghur fighters of Xinjiang province of China who joined terrorist groups in Syria over past years as Turkey facilitated their entry to the war-hit Arab country. Reports say that 10,000 to 20,000 Uyghur fighters are residing in Syria’s Idlib province, the last Syrian region still held by the terrorists. Beijing is afraid that their return to China will pose security risks to the national security.

But Turkey appears to be keen to address the Chinese security worries. On August 3, 2017, during a meeting with his Chinese counterpart in Singapore, the Turkish Foreign Minister Mevlut Cavusoglu vowed to root out militants plotting against China, signaling closer cooperation against suspected Uyghur militants hailing from China's far west, adding that his government would treat threats to China's security as threats to itself and would not allow any "anti-China activity inside Turkey or territory controlled by Turkey."