. . .And All I Got Was This Lousy T-Shirt: Turkey, China, Trade, and the Limits of Diplomatic Reciprocity
The breadth and depth of Turkish and Chinese economic involvement with neighboring countries means that a greater number of international events have real impact on these nations’ vital interests. Consequently there exists an increasing array of issues on which Turkish and Chinese interests overlap. The following several sections of this paper will consider Turkish and Chinese interests and the ways in which each has helped facilitate or block the ambitions of the other.
But, first, an example:
II. What Turks Want
In 2009 Turkey’s president, Abdullah Gül, visited China’s Xinjiang province. The president’s purpose in visiting China was to promote trade relations—specifically, to encourage Chinese investment in Turkey as a means of offsetting the two country’s large trade deficit—but the visit to China’s far western province had larger significance as well: A plurality of Xinjiang’s population is Uighur, an ethnically Turkic group.
For years, Turkey had retained close relations with the Uighurs, even going so far as to offer Uighurs automatic Turkish citizenship. Since the 1950s, several thousand Uighurs had settled in Turkey—the largest and most active number, as it happened, in President Gul’s hometown of Kayseri. “Wilingly or not, Turkey [gradually became] the basis of the Uighur nationalist movement.” In the years following the fragmenting of the Soviet Union, the Turkish government attempted to position itself as model and spokesman for the newly independent Turkic populations of Central Asia. Taking a more active role in sponsoring Uighur groups in Turkey was a part of this positioning and, during the early 1990s, the Turkish president and prime minister met with leaders of the “East Turkestan” nationalist movement.
Such provocative gestures were unsustainable. Turkey in the 1990s faced serious internal crises; most seriously an uprising in the Kurdish southeast. The harsh methods used by the Turkish government and army to quell the Kurds drew international condemnations and made arms purchases more difficult. The Chinese government, however, was willing to sell advanced weapons systems to the Turks. Purchases of Chinese rockets and missiles began in the late 1990s, as did a distinct cooling in Turkish enthusiasm for Uighur political aims. Uighur claims of human rights abuses in 1997 were met with a Turkish a call for patience until “all the facts were understood.” The possibility of citizenship for Uighur refugees and the option of military service in the Turkish army were also revoked. Under Prime Minister Mesut Yilmaz, civil servants were given instructions to avoid participation in any “East Turkestan”-related activities. When Chinese President Jiang Zemin visited Turkey in 2000, he spoke of Chinese support for Turkey in its struggles against those who contested its unity. The implication was that Turkey reciprocated the Chinese position.
Thus, a decade later, when the Turkish president arrived in Xinjiang’s capital city of Urumqi, the Turkish government had clearly taken sides. Along with his wife, President Gül visited a local part and the city’s main university where he received an honorary degree. In his thank-you speech, Gül described how the Uighur people “played the role of friendship bridge” between Turkey and China—a politic way of saying that Turkey would step over them to reach the Chinese.
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What exactly had Turkish leaders gained in distancing themselves from the Uighurs? By 2009, the Kurdish struggle had subsided, yet over the past decade trade between Turkey and China had risen. Turkish exports had grown from around $100 million in 2000 to $1.6 billion (and rising) in 2009. (Problematically, Turkish imports from China had grown at an even greater rate.) During the previous ten years, Turkey had changed significantly as well; whereas its vision of leading its neighbors during the 1990s had been largely lacking in substance, Turkey was now highly influential in the surrounding region. Its construction firms and brands were highly successful in the Middle East and North Africa region (MENA).
The goal of the Turkish political leadership is—no different from any rulers—to stay in power. As Turkey is a democracy, achieving this ambition requires re-election. The ruling Justice and Development Part (AKP) derives its electoral popularity from sound economic management as well as more symbolic achievements such as positioning Turkey as a defender of Palestinians and proponent of Muslim values.
The two objectives are tightly linked: the ruling party is highly dependent on the vast class of pious businessmen that has emerged in Turkey over the last thirty years. The liberalization of the Turkish market during the 1980s created windows of opportunity for many of entrepreneurs in Turkey’s vast interior. Access to remittances from abroad, Islamic banking, and networks organized along lines of Islamic sociability allowed these businessmen to expand their operations both nationally and across borders, especially into regions of the former Ottoman Empire. Economic involvement with these states, however, has made Turkish public opinion particularly sensitive to the political problems of these states and forced the government to pick sides during conflicts such as the recent Arab Spring movements.
In Libya, for example, Turkish firms had nearly $15 billion in contracts with the Qaddafi regime, as well as a sizeable contingent of Turkish citizens living in the country, working on various engineering and construction projects. In the initial weeks of protests, rioters targeted Turkish construction sites. It was unclear whether a revolution would be to the advantage of Turkish political or business elites, and the government prevaricated before finally committing its support to the rebels.
In Libya, Egypt, and now Syria, the Turkish government has had to choose sides and take actions in keeping with the position of regional influence it has sought for itself. This has necessitated leading diplomatic initiatives at the UN, NATO, and the Arab League, forming relationships with rebel movements and new regimes, and attempting to maintain or expand its economic foothold in these countries.
Whereas Turkish interest in much of the MENA region is export-driven, its need for imports—especially energy—has created political headaches as well. In the case of Iran Turkish need for energy inputs has led it to oppose moves by western governments to sanction the country over for its nuclear ambitions.
Closer to home, there is desire for more foreign direct investment (FDI). With a current account deficit running at 10% of GDP as of December of 2011—the highest of any country—Turkey has been aggressively soliciting foreign capital. Although its economy is booming, for a variety of reasons it has not been an attractive destination for foreign capital.
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Chinese leaders are faced with the opposite problem: with large current account surpluses, the Chinese are looking for places to invest their money and secure flows of raw material inputs to keep the economy growing. Just as the Turkish government has been forced of late to take stands either supporting or opposing regimes with which it once had cozy business relations, so too have the Chinese had to pick sides.
The interests of the Chinese leadership are similar to those of the AKP: while their continued control of their country is certainly backed by a greater threat of force than is the Turkish government’s, a booming economy diminishes the need for coercion, consequently Chinese leaders remain equally concerned with sustaining growth. Unlike in Turkey, FDI is high in China and finding markets for cheaply produced Chinese goods occurs with relative ease. What Chinese manufacturers need most are predictable flows of inputs—and this predictability requires politically stable partner states to provide such flows. Turkey, by contrast, is a less obvious source of cheap labor and manufactured goods; its growth relies on actively developing networks and maintaining relations with locals in partner markets. The difference may be slight, but it hints at a mismatch between the two governments’ foreign policy objectives.
The sheer range of the two countries’ interests is also mismatched. Chinese businesses are active all over the world and China represents a significant portion of the overall trade with any of its partner countries. It can have great influence in distant places. Turkey, by contrast, is more regionally focused: unrest in Syria, say, will have spillover effects on Turkey that will not effect China. Deluges of refugees and potential Kurdish militancy in border regions may force Turkish involvement, while Chinese leaders can retain diplomatic flexibility. Yet, even at a distance, China remains highly important to the course of events. After the EU, Iraq, and Saudi Arabia, China is Syria’s largest trade partner, followed by Turkey. China, thus, looms large in the stability of the Syrian regime even through Syria does not even rank among its top fifty trade partners.
Libya and Egypt are similar cases. In both counties, China trade represents a significant proportion of all trade—only the EU and (in the case of Egypt) America play a larger role. At the time of the Libyan revolt, there were around seventy-five Chinese firms operating in the country and Libyans were supplying China with 3% of its total oil imports. Unrest in Libya necessitated the evacuation of more than 35,000 Chinese nationals who had been working in the country. This operation entailed the unprecedented deployment of a Chinese navel ship to the Mediterranean. While Chinese leaders did not openly oppose western moves to support the Libyan rebels via a UN resolution, they did not wholly cut support to the Qaddafi regime. In the first place, Chinese officials criticized the west’s resort to force; in the second, more controversially, state-owned arms manufacturers met with representatives of the Qaddafi regime in order to arrange arms sales. As momentum began to shift decisively to the rebels, the Chinese government entered into talks with leaders. A senior Chinese diplomat was sent from Egypt and the head of the Libyan rebels was allowed to visit Beijing for high-level talks. Despite such overtures, relations continued to be tense. In late August, for example, Abdeljalil Mayouf, the information minister for the rebel-run oil firm AGOCO, explained that, “we may have some political issues with Russia, China and Brazil” as a consequence of their less than fulsome support.
In the case of Egypt, China plays a less determinate role. While Chinese investment has risen from $5 million to $50 million annually in the past four years, China was a relative new entrant on the Egyptian scene—a far larger number of Chinese dealings along the Nile are with the country’s neighbor, Sudan. There (and elsewhere in Africa) China is among the many governments buying up tracts of land to ensure food security. Such actions effect Egyptians to the extent that they raise the price of bread and divert water that would have otherwise flowed north to Egyptian farms.
During the anti-Mubarak protests of January and February 2011, the Chinese government provided rather non-committal support the regime. To a visiting Egyptian official, Vice Foreign Minister Zhai Jun stated that China supported “Egypt’s efforts of maintaining national sovereignty, social stability and solidarity of its people and opposes the interference of any external force in Egypt’s internal affairs.” Less than two months later, with Mubarak now gone, Zhai was in Egypt, meeting with officials, receiving assurances that “[developing] relations with China is an established policy of Egypt and will remain unchanged even if the situation fluctuates.” In April, the following month, the Chinese government dispatched a trade delegation offering loan guarantees from the Chinese Development Bank and inked several business deals.
In both cases, Turkey faced similar dilemmas. Unrest in Egypt and Libya had forced Turkish factories to shut their doors and, in the case of Libya, where Turkish properties were attacked, conduct equally large-scale evacuations. As protests in Egypt swelled, Prime Minister Erdoğan called on Mubarak to “meet the people’s desire for change without hesitation. No government can stand against the people.”  Words of this sort, coming only six days into the protests, helped endear Erdoğan to many Egyptian protesters. By September, when Erdoğan made his first post-Mubarak visit, he was greeted by a cheering crowd of nearly 20,000.
In Libya, Turkish leaders achieved a similar success—albeit a more circuitous one. Egypt’s Arab Spring experiences were mild in comparison to Libya’s where protests almost immediately spiraled into violence and where voicing support for the opposition was unmistakably a call for revolution. There was less room in the Libyan case for ambiguous statements about “listening to the people.” Nor was the Turkish position helped by the fact that European powers were leading the charge. The French president called for Qaddafi’s resignation on February 25th, a week into the conflict, followed by the American president two days later.
At the UN, Turkey voted in favor of a resolution authorizing a no-fly zone, but diplomats maintained their preference for a political rather than military solution. Concerned that the French were using the intervention in Libya to gain influence, Turkish diplomats argued that NATO, not a coalition led by France, should oversee the no-fly zone. By making the Libyan invention into a NATO affair, Turkey guaranteed itself a seat at the negotiating table, even though it did commit to the actual bombing. Turkish diplomats protested civilian casualties caused carelessly by NATO, and in this manner were able to position themselves favorably in respect to Arab public opinion. It was not until the beginning of May, though—a month and a half into the bombing—that Erdoğan finally called for Qaddafi to resign.
In the following months, Turkish officials worked to cement ties with the opposition National Transition Council. Once Tripoli fell on August 21st, business could resume in earnest. Yang Jiechi, the Chinese Foreign Minister, quickly argued that the UN should oversee the Libyan reconstruction effort, which would give Chinese enterprises an advantage in securing contracts. By early September, however, the Turkish Ministry of Energy had announced that a joint private-public effort by Turkish enterprises would oversee the rebuilding of the Libyan electrical infrastructure.
Of all the Arab Spring movements, however, it was the uprisings in Syria that struck Turkey closest to home and forced it to take the most active lead. In the Syrian case, consequently, the Chinse government’s standing policy of non-intervention conflicts to the greatest degree with Turkish interests. Chinese economic ties to Syria have grown in recent years to the point where China has become the country’s greatest source of imports. China directs the largest percentage of its FDI in Syria to the oil industry. In 2008, for example, China Petrochemical Corp. (Sinopec) bought Tanganyika Oil, a Canadian company with large investments in Syria. Since that purchase, Sinopec has spent large sums modernizing Syrian production facilities to increase efficiency.
As in Libya, the Arab Spring has resulted in violence rather than mere protest. The Assad regime’s heavy handed attempts to silence its opposition has led European governments and the US to call for action in the form of economic sanctions, travel bans, and arms embargoes, but China (and Russia) have continued to block any such moves at the UN level. In October a resolution criticizing the Syrian regime and demanding that it halt its crackdown was voted down by the two countries—even after the language had been watered down to avoid specifying concrete threats.
Turkey meanwhile has been vigorous in its opposition to the Syrian regime’s tactics. Though Erdoğan had formed close relations with Assad during the past decade, the influx of 8,000 refugees into Turkey, the obvious inability of the Assad regime to stabilize the country, and the regime’s unwillingness to heed Turkish advice led to Erdoğan’s call for Assad to step down in November 2011. In early December Turkey halted all business with Syrian government banks and placed travel bans on both Syrian politicians and businessmen tied to the regime. These sanctions did not halt trade with Syria—only with its governing elite. In response, however, the regime suspended its free-trade agreement with Turkey, leaving hundreds of long-haul trucks lined-up at the border. Without a clear endpoint in sight, the sanctions have angered many of Turkey’s southern residents who depend on cross-border trade. Syria will likely have to turn further toward regimes like China whose non-intervention in internal affairs provides the regime with some room to maneuver.
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Beyond this jockeying in third-party countries, China and Turkey have a number of bilateral interests. With a foreign exchange reserve of some $3 trillion, the Chinese government has money to burn and Turkey wants a portion of it. On his visit to China, for example, President Gül oversaw a number of mutual cooperation agreements in areas including energy, media, and tourism. While in many areas—increased Chinese tourism, for example—promises will be hard to guarantee, in other areas, there were concrete results. The number of flights per week between the two countries was significantly increased; Xinhua and the Anatolian News Agency agreed to share information; and Turkey’s Cenay Group and China’s CEEC solidified plans to “carry out a subway project in Turkey, highway construction in Azerbaijan and several investments in the energy sector.”
For many years, Turkish elites looked to China as a promising market for Turkish products. As Kenan Evren, president during the 1980s, suggested, “If every Chinese buys one of our oranges, we will be rich.” This strategy has proved illusory in the near term; more prevalent now among Turkish firms is the hope that the Chinese government will direct favorable loans to Chinese enterprises interested in making investments in Turkey. Local Turkish firms are especially well positioned in the regional energy and construction sectors, so it would behoove Chinese firms to establish joint-partnerships. Or, equally beneficial, Chinese firms could establish manufacturing concerns in Turkey and use the country as a funnel for moving goods into European markets, thereby avoiding the quotas that many countries have placed on Chinese goods. Either sort of investment would help offset the current account deficit between the two countries.
The past several years signaled increasing moves in this direction: in 2003, the Turkish government introduced a new FDI law that increased the legal equality between local and foreign investments. In the following two years FDI into Turkey surged. China, for example, began establishing partnerships with Turkish auto manufacturers, wholesale distributors, and retail outlets.
In October 2010, Chinese Premier Wen Jiabao, while visiting Turkey, facilitated a slew of new memorandums of understanding relating to infrastructure and energy projects. These included a 7000 kilometer high-speed rail network funded via Chinese loans. The following month Turkey’s Foreign Minister added that security cooperation would also be a focus. In June 2011 the Turkish Economy Minister announced that Chinese bank branches would be opened in Turkey; the banks would help in funding various joint-venture projects and in facilitating bilateral trade using the lira and yuan.
Not that FDI flows exclusively from China to Turkey: In Shenyang, China, for example, Turkmall and Fiba Holding have overseen the building of a major new shopping center that will include a number of Turkish shops.  These include companies like the jeweler Goldas, which already has a presence in the Shanghai-region. A second mall in Nanjing is also in progress.
Nor, despite its rank as a top FDI destination, does all FDI flow to China. Price fluctuations in China have led a number of clothing makers such as GAP and Adidas to move production to Turkey where costs are more stable and the textile industry does not rely solely on volume to generate profits—Turkish firms are better able to produce small runs. When it comes to making luxury apparel, Turks still have some advantages over their massive competitor.
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All the foregoing is largely a paean to free trade. The leaderships of both countries derive their legitimacy from economic growth; closer relations facilitate that growth. Even the areas of conflict, so far mentioned, are largely are resolved by market interests and political realities. It is in non-market matters that the imbalance between the two is most glaring.
Only six days after Gül left China, riots broke out in Urumqi. First Uighurs rioted, targeting Han Chinese neighborhoods and eliciting a harsh response by security forces; next, Han responded by targeting Uighurs. When all was said and done, 156 were dead and hundreds more were injured, with the distribution of ethnicities hotly contested by state officials and Uighur activists. The violence was only quelled when the state declared martial law in the province, closing mosques on Friday and cutting internet access.
In Turkey, the riots were headline news. Although the government had moved away from supporting Uighur nationalist organizations, sympathy for Uighurs remained widespread and Pan-Turk enthusiasm remained a strong element of opposition party rhetoric. Initially, the strongest government denunciation came from Nihat Ergün, the Minister of Industry and Trade, who called for a boycott of Chinese goods. Although he quickly revised his comments to emphasize that this proposal was merely his opinion and not the policy of the government, a day later the Erdoğan outdid him by declaring the violence to be “almost genocide.” Further, the Prime Minister suggested that the issue be taken up at the UN.
Nothing came of the UN initiative and Turkish leaders quickly realized how weakly their criticisms resonated on the world stage. With their own regions festering with minority discontent and a record of human rights abuses in those areas more than equal to the Chinese, Turkish officials would have opened the country up to counter-charges had they brought the Uighur matter to the UN. Instead Turkish MPs voted to send a fact-finding mission to Urumqi. To ease tensions and reassure the Chinese, Zafer Cağlayan, the Trade Minister, was sent to Beijing the following month. In order to tone down public agitation, Uighurs seeking to protest outside the Chinese embassy were turned away by police, and Rebiya Kadeer, a leader of the Uighur nationalist movement, was denied a visa to Turkey.
A year later, the Turkish Foreign Minister Ahmet Davutoğlu made a visit to Xinjiang. In the aftermath of the riots, the Chinese government had increased spending in the region. There was talk of a Sino-Turkish business park 40km outside Urumqi There was even discussion of turning the border city of Kashi—“Kashgar” in Uighur parlance—into a Shenzhen-style special economic zone. More controversially, the Chinese government razed large portions of Kashgar’s old city center and relocated much of its population, ostensibly to give them better housing.
The Turkish climb-down from allusions of genocide to business-relations as usual, suggests that Turkish leaders are in no position to challenge China, even on issues of particular interest to themselves. This unequal relationship can be seen in other issues as well. In the case of Taiwan, for example, Turkey followed the US line, recognizing the island regime as China’s legitimate government until 1971. Though Turkey voted against the PRC’s UN membership, it accepted it as China’s government beginning in August 1971 and began strengthening its bilateral relations. The two countries signed a trade agreement in 1974 and exchanged Presidential visits in the early 1980s. Turkish firms and politicians largely ignored Taiwan until the 1990s when the country became a reliable source of advanced technology. Even twenty years later, though, integration between the two economies remains weak. Though Taiwanese businessmen are eager to invest in Turkey, the countries still lack direct flights, and a Taiwanese consulate—or “Economic and Cultural Office”—remains absent from Istanbul. Deference to the PRC’s sensitivities is the main barrier to any potentially beneficial deepening of ties.
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Without over simplifying, it is fair to say that the leaders of Turkey and China seek both concrete and symbolic achievements to maintain their positions. Sustained economic growth is a shared goal, though, as regards the MENA region, they have divergent views as to what political arrangements will produce the best growth environments. As regards bilateral relations, Turkish leaders more frequently find themselves in the position of supplicants, retracting statements and revising policies to keep Chinese leaders happy. Hardly an equal relationship.
 Yitzhak Shichor, “Ethno-Diplomacy: The Uyghur Hitch in Sino-Turkish Relations.” East-West Center. 2009, p. 17.
 Ibid. p. 33.
 Selçuk Çolakoğlu, “Turkey and China: Seeking a Sustainable Partnership,” SETA [Foundation for Political, Economic and Social Research] Policy Brief. No. 41, 2009, p. 5.
 “Gül’e Sincan Üniversitesi’nde fahri profesörlük unvanı verildi.” Zaman. 6/29/09.
 See Filiztekin, Alpay and İnsan Tunalı. (1999) “Anatolian Tigers: Are They For Real.” New Perspectives on Turkey. No. 20. Pp. 77-106, and Özcan, G. B. (2003). “Limits to Alternative Forms of Capitalization- The Case of Anatolian Holding Companies.” World Development, 31(12).
 Turkey Gets the Worst of Two Worlds,” Inter Press Service, 3/1/11
 Syria is Turkey’s eighteenth largest trade partner representing less than 1% of its bilateral trade.
 “Europe leads Libyan oil race as rebels warn Russia and China,” Ahramonline.com, 8/22/11, and “”People’s Daily, 8/30/11.
 Though Egyptians predict China will surpass the US as a source of imports in a few years. ( Jon Alterman, “China’s Soft Power in the Middle East,” Chinese Soft Power and its Implications for the United States, Center for Strategic and International Studies, March 2009, p. 65)
 China accounts for 45% of Sudan’s international trade—in Egypt, the EU and US in combination achieve similar numbers.
 A recent NYT op-ed by Lester Brown drew attention to these issues (“When the Nile runs dry,” 6/1/11), but other papers have touched on it. Some (David Smith, “The food rush: Rising demand in China and west sparks African land grab,” The Guardian, 7/3/09) play down China’s role. For a good overview of the issue, see the UN report Land Grab or Development Opportunity?
“Vice Foreign Minister Zhai Jun and Egyptian Assistant Foreign Minister for Asian Affairs Higazy Hold Regular Political Consultation between the Chinese and the Egyptian Foreign Ministries,” Ministry of Foreign Affairs of the PRC, 1/27/11.
 “Turkish PM Erdoğan urges Mubarak to heed Egyptian outcry,” Turkish Daily News, 2/1/11.
 Gus Lubin, “China Swoops In To Claim Lucrative Libyan Infrastructure Deals,” Business Insider.com, 8/25/11.
 And this, apparently, is a artificially low figure since many more Chinese imports arrive via the UAE, dressed up in new packaging to avoid Syrian tariffs on non-Arab imports. (Phil Sands, “China’s influence in Syria goes beyond trade boom,” The National [Australia], 8/26/08)
 Henri Barkey, “Turkey’s hard stance on Syria hides its conflicted loyalties,” Turkish Daily News, 11/23/11
 “Turkey, China eye multi-billion dollar deals,” Turkish Daily News, 6/25/09
 Tao Zan, “Uncertainty and Ambiguity: Turkey’s Perception on the Rise of China,” Journal of Middle Eastern and Islamic Studies (in Asia), Vol. 3, No. 1. 2009, p. 75.
 “Chinese, Turkish firms ink deal,” Turkish Daily News, 7/7/09.
 Nadir Kemal Yilmaz, Fang Lee Cooke, and Rosita Dellios, “Turkey’s FDI Policy and Chinese Direct Foreign Investment in Turkey: Some Economic and Management Implications,” Global Business Review, 9(1), p. 7.
 “China to extend $30 bln for Turkey’s high-speed train network,” Today’s Zaman, 10/15/10.
 “Turkish joint venture invest big in China,” Turkish Daily News, 10/13/11 and Turkmalls.com
 Necla Dalan, “Textile giants opting for Turkey over China for production,” Turkish Daily News, 1/5/11 and Dilek Çukul’s “Competitive Aspects of Turkish and Chinese Textile and Clothing Industries” [manuscript submitted to the 8th Global Conference on Business and Economics in Florence, 2008].
 “‘Çin mallarına direkt boykot çağrımız yok,’” Milliyet, 7/10/09 and “Başbakan: Çin’de olanlar ‘adeta soykırım,’” Hurriyet, 7/10/09.
 Selçuk Çolakoğlu, “Turkey and Taiwan: The Relationship Seeking its Ground,” USAK [International Strategic Research Organization] Policy Brief. No. 2. 8/11, p. 16