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‘Non-Western lingo was used to show that relations with China are considered independent of the West’

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The visit of Chinese Foreign Minister Wang Yi to Turkey, who met with Foreign Minister Hakan Fidan and then President Erdoğan in Ankara yesterday, can be seen as an opportunity to put relations back on track after they were strained by the domestic political agenda during the election period. In particular, Wang’s emphasis on the need to encourage more Chinese companies to invest and do business in Turkey seems to have pleased Ankara, which is seeking foreign investment in the midst of an economic crunch.

Indeed, the center of gravity of the meeting was the Central Corridor from Beijing to London, with Turkey at its center. While President Erdoğan expressed his desire to accelerate cooperation in the context of harmonizing the Belt and Road Initiative and the Central Corridor, Wang Yi, who is also a Politburo Member of the Central Committee of the Communist Party of China Central Committee and Director of the Central Commission for Foreign Affairs, stated that “they are ready to enhance mutual strategic trust and deepen cooperation with Turkey”.

The Chinese Foreign Minister emphasized that they support Turkey to play an important role in the regional and international arena and that they oppose any foreign interference in Turkey’s internal affairs.

Chinese media also highlighted President Erdoğan’s telling Wang that they “do not support NATO’s increasing activities in the Asia-Pacific” and emphasizing their commitment to the “one-China” principle.

The Uighur issue, seen as one of the most critical problems in the relations between the two countries, was glossed over with a sentence such as “The situation of Uighur Turks was also discussed on the occasion of the visit”, once again showing that the emphasis and statements made on the ‘Uighur issue’ during the election period were handled in the context of domestic politics.

‘Economy and trade dynamics are catalysts in Turkey-China relations’

Commenting on the visit to Harici, Istanbul Gedik University ASEAN Center Director Dr. Sibel Karabel pointed out the importance of timing conjuncturally and said the following:

“First of all, it is necessary to briefly evaluate the state of Turkey-China relations in the current conjuncture and the extent of economic and trade relations. The strategic partnership of the two countries should also be emphasized in this context. In 1971, diplomatic relations were established and as President Erdoğan and Foreign Minister Hakan Fidan stated in the meeting, Turkey has been adhering to the ‘one China’ policy since then. In 2010, a strategic partnership was established. In 2015, Turkey officially joined the Belt and Road Initiative with a memorandum of understanding. And mutual commitments have been made to continuously increase the volume of bilateral trade and engagement between the two countries in the regional and global context.”

Stating that economic and commercial dynamics are “the catalyst” in Turkey-China relations, Karabel listed the following data: “When we evaluate the background of the Belt and Road Initiative, a target was set for the mutual trade volume between the two countries to reach 50 billion dollars as of 2015. We are talking about a trade volume of 33 billion dollars. On the other hand, Turkey’s foreign trade deficit against China, which unfortunately increases rapidly every year, especially between 2019 and 2022, is an important issue. In fact, in this context, the Belt and Road initiative is both an initiative that will highlight Turkey’s potential to become a center for transit trade and an initiative that has the caliber that can cure this problem. In other words, the investments made and planned to be made in the Belt and Road initiative have the potential to turn these trade dynamics between Turkey and China a little more in Turkey’s favor.”

Pointing out that Turkey is currently lagging behind this potential, Karabel summarizes the dynamics of the current commercial relationship as follows: “We know that the total investment of Chinese companies in the Belt and Road Initiative between 2013 and 2022 is approximately 1.4 trillion dollars. And in the same period, we see that the investments allocated to Turkey are 5.11 billion dollars. So our share in total investments is around 1.3 percent. And especially when we look at the trade balance between Turkey and China between 2019 and 2022, we see that imports have doubled. In other words, by nature, semi-finished goods are imported from China and processed and re-exported to the European Union countries. This is the dynamic of the trade relationship.”

Central Corridor emphasized

Sibel Karabel noted that the Belt and Road Initiative and the Middle Corridor were particularly emphasized in the talks, and that Foreign Minister Hakan Fidan drew attention to different energy fields, aviation fields, different sectors, and mentioned “improving the Belt and Road Initiative’s ability to respond to global threats and global challenges”.

Underlining the importance of Wang Yi’s emphasis on “developing strategic mutual trust and deepening cooperation mechanisms”, Karabel said, “Wang Yi even talked about a future-oriented and broad-targeted relationship dynamic in his meeting with President Erdoğan.”

‘A relationship within its own dynamics separate from the West’

On the other hand, drawing attention to President Erdoğan’s emphasis on the ‘One China policy’ and the fact that China’s development is not perceived as a threat by Turkey, Karabel stated that the expression “China’s development is perceived as a threat” is a Western jargon, and that it is a matter of how the West sees China: “The West perceive China’s development as a threat when evaluated from the realist paradigm in the context of the relative balance of power on the global level.”

In this context, Karabel said that Erdoğan’s statement that “they do not see China’s development as a threat” can also be considered as a “tacit reference” to NATO documents and commented as follows “In fact, there is a tacit emphasis here that Turkey’s relations with China are independent from the West and have their own dynamics. This is an important emphasis.”

The importance of the Central Corridor and Turkey increased after the Ukraine crisis

Karabel also touched upon the importance of the Ukraine issue in the bilateral relations and discussed this in the context of Turkey’s growing importance in the Belt and Road Initiative and the Middle Corridor:

“The Belt and Road Initiative is actually a very dynamic initiative and is being pursued under the direction of the National Planning Commission in China. It is not only a matter of combining the plans, projects and infrastructure lines that were declared in 2013 and have been rigidly and rigidly implemented since then, but also the articulation of previous mechanisms and projects into the Belt and Road Initiative. Therefore, the Central Corridor, where Turkey is located, is actually more prominent in the context of Ukraine. As a matter of fact, one of the biggest trademarks of the Central Corridor is that it is more advantageous than the Northern Corridor and the Southern Corridor. On the trade route from China to Europe, it has a cost advantage because it stops at fewer countries. There is also a very serious saving in time. It significantly reduces the number of days of transportation. In fact, before Ukraine, the route that China tended to use more was the Northern route. Now there are more countries on the Southern route. There are countries subject to sanctions etc. So now, after the Ukraine incident, the importance of the Middle Corridor has increased a bit more for China.”

The course of relations with the US, EU and China reflects the new era of Turkish foreign policy

On the other hand, evaluating the visit together with the NATO summit, Karabel points out that events and sectors are intertwined with each other and that this situation reflects the new era of Turkish foreign policy:

“At the NATO summit, the F-16s came to the fore, especially in the Swedish issue, and on the other hand, Turkey’s integration with the European Union and the European Union membership negotiation process were brought back to the agenda. The revival of Turkey’s full membership negotiations with the EU is a step towards revitalizing the almost frozen relationship. Turkey’s relations with the European Union do not only consist of membership negotiations. That is an important part, but there are also acute issues. For example, the Customs Union, modernization of the Customs Union negotiations, visa liberalization. In fact, there are a number of acute mini-sectoral issues. Therefore, on the one hand, there is an effort to revitalize these, and on the other hand, there is an effort to carry out relations with the United States in a way to develop relations on a more common ground, such as the F-16 issue.

On the other hand, as a result of the conjunctural developments in relations with China and Asia, we observe that Turkey’s leverage is actually increasing, especially in issues such as being an epicenter of transportation and turning this structural trade balance in its relations with China more in its favor. These are indeed conjunctural and historical opportunities, important opportunities.”

DIPLOMACY

Xi Jinping rejects Brussels summit invitation

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Chinese President Xi Jinping has reportedly declined an initial invitation to visit Brussels for a summit marking the 50th anniversary of relations with the European Union.

According to two individuals with knowledge of the matter who spoke to the Financial Times, Beijing has informed EU officials that China’s second-ranked leader, Premier Li Qiang, will meet with the presidents of the European Council and Commission in Brussels in Xi’s place for the summit.

EU-China summits traditionally alternate between Brussels and Beijing. While the premier typically attends the summit in Brussels, Xi usually hosts in Beijing. However, the EU believes that the significance of this meeting, which commemorates half a century of diplomatic relations, warrants the presence of the Chinese President.

Both parties have stated that discussions are ongoing, but Xi’s rejection of the invitation has raised questions among many in Brussels.

This year’s summit coincides with a particularly sensitive period in EU-China relations.

Tensions between Brussels and Beijing have escalated since Russia’s intervention in Ukraine in 2022, with the EU accusing China of supporting the Kremlin. The EU is also imposing tariffs on electric vehicles imported from China, citing that they are subsidized.

EU officials assert that China, which recorded a trade surplus of €304.5 billion with the bloc last year, has not made sufficient efforts to rebalance trade by reducing subsidies to its industries and lowering trade barriers for foreign companies operating in the world’s second-largest economy.

A senior EU diplomat told the Financial Times that “relations are icy.”

Lu Shaye, China’s former ambassador to France and currently Beijing’s special representative for European affairs, stated that China’s policy towards Europe has always “advocated peace, friendship, cooperation, and mutual benefit.”

“This has never changed. It is only the contrast with the US’s current policy towards Europe that makes China’s policy towards Europe appear even more visionary, fair, and reasonable. I hope this will be a wake-up call [for Europe],” he said.

The diplomat added, “China has even said that they expect Europe to have a seat at the negotiating table [in Ukraine peace talks].”

EU trade chief Maroš Šefčovič is scheduled to visit China later this month. Spanish Foreign Minister José Manuel Albares told the Financial Times last month that the EU should also see potential opportunities. Albares said, “If China can be a partner, let’s take advantage of that.”

European Commission President Ursula von der Leyen stated in February that the EU would continue to “de-risk” by protecting its industry, while adding, “we may find agreements where we can further expand our trade and investment ties.”

Trump’s imposition of 25% tariffs on steel and aluminium forced the EU to retaliate, even as industry groups warned of the damage it would cause. However, a senior EU official said that a critical focus when it comes to China is defensive measures to keep out the “wave” of Chinese products diverted from the US market due to tariffs.

On Friday, the EU initiated an anti-dumping investigation into exports of adipic acid, used in the production of nylon and numerous other products, to China. This is the 11th such case since October, including those related to sweet corn, metal screws, and waxes.

An EU official stated, “Informal discussions are ongoing, both on the timing of this year’s EU-China summit and on the level of representation.”

The Chinese Foreign Ministry stated that they had “no information to provide” on the matter.

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US to tighten entry rules for Russian citizens

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The Donald Trump administration is reportedly planning to introduce new restrictions on entry to the US for citizens of forty-three countries, including Russia and Belarus.

According to The New York Times, citing American officials familiar with the matter, the project was prepared by American diplomats and security units and envisages dividing countries into three categories: “red,” “orange,” and “yellow.”

Travel to the US will be significantly restricted for citizens of the ten countries on the “orange” list.

Only “wealthy business travelers” from these countries will be allowed to enter the country, while tourist and immigration visas may be prohibited.

In addition to Russia and Belarus, Haiti, Laos, Myanmar, Pakistan, Sierra Leone, South Sudan, Eritrea, and Turkmenistan are also planned to be included in this list.

The “red” list includes eleven countries: Afghanistan, Bhutan, Cuba, Iran, Libya, North Korea, Somalia, Sudan, Syria, Venezuela, and Yemen, and citizens of these countries will be completely banned from entering the US.

The 22 countries on the “yellow” list will be given 60 days to address US concerns. Otherwise, these countries may also be placed in the “orange” or “red” categories. This list generally includes Caribbean and African countries.

It is not yet known whether the new regulation will affect existing visas and residence permits (green cards).

It remains unclear whether these will be canceled.

The recommendations regarding the new entry regulation were prepared by the State Department a few weeks ago, but the document may be revised before being submitted to the White House.

In addition, The New York Times recalled that in January, Donald Trump signed a decree envisaging the identification of countries whose information provided was “insufficient for verification” and the partial or complete suspension of entry for citizens of these countries.

The newspaper also noted that Trump imposed a similar ban during his first presidential term (2017-2021), but this ban was later lifted by his successor, Joe Biden.

The report noted that officials from various government agencies declined to comment on the matter.

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CK Hutchison shares fall after China criticizes Panama port sale

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Shares in Hong Kong-based conglomerate CK Hutchison fell 5% on Friday after China criticized the sale of its Panama Canal ports and suggested it should “think twice” about a $22.8 billion deal with US asset manager BlackRock.

A strongly worded commentary, which first appeared in Hong Kong’s Beijing-backed newspaper Ta Kung Pao and was reposted late Thursday by China’s top office in charge of the territory’s affairs, accused the US of using “despicable means” to pressure the deal.

The article stated, “[Critics] say this is a spineless, fawning, profit-seeking move that sells out integrity for personal gains and disregards national interests. [It is an act of betraying and selling out all the Chinese people].”

It emphasized that China’s maritime transport and trade would be hindered by the US and that CK Hutchison should “think twice” about “what position and side it should be on.”

Dan Baker, a senior equity analyst at Morningstar, said concerns over whether the deal would be completed after securing approval from the Trump administration were reflected in Friday’s share price decline, but that the move might be an “overreaction.”

“To the extent that the company still has assets in China, if the Chinese government is angry with them for making this sale, there is probably some potential investor concern about what might happen to their businesses that are still there,” Baker said.

Mainland China and Hong Kong accounted for about 14% of CK Hutchison’s 2023 revenues, while revenues from the UK and Europe accounted for about 50% of that.

CK Hutchison did not immediately respond to a request for comment. Its shares had risen more than 20% in Hong Kong when the deal was first announced last week.

At the time, Chinese Foreign Ministry Spokesperson Lin Jian declined to comment on the sale but denied Trump’s claims that China controlled the canal.

Under the agreement in principle, 43 ports owned by billionaire Li Ka-shing’s CK Hutchison company, located at both ends of the Panama Canal, will be sold to a consortium that includes BlackRock.

These ports include those in the UK and Germany, as well as Southeast Asia, the Middle East, Mexico, and Australia.

According to the Financial Times, BlackRock CEO Larry Fink briefed senior officials from the Trump administration, including the President and Secretary of State Marco Rubio, to secure their support for the takeover.

The deal was planned a few days after Donald Trump took office. The President said in his inaugural speech: “The Panama Canal is operated by China… and we are taking it back.”

Li, who retired as chairman of CK Hutchison in 2018 and still serves as a senior advisor, was actively involved in the negotiations.

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