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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

Argentina and the IMF: Negotiations begin for a new $44bn agreement

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Argentina is pursuing a new agreement with the International Monetary Fund (IMF) to replace its current $44 billion arrangement. The effort signals a significant shift in the country’s financial strategy under President Javier Milei’s administration.

IMF Chief Spokesperson Julie Kozack confirmed on Thursday that the Milei government is prioritizing the establishment of a new programme over completing the final reviews of the existing deal inherited from the previous administration. According to a Bloomberg report, Kozack stated, “The authorities have formally expressed their desire to move to a new programme, and negotiations are now underway.”

The discussions intensified following a visit earlier this month by officials from Economy Minister Luis Caputo’s office and the central bank to Washington, where they engaged with IMF representatives.

The central question in the negotiations revolves around whether the IMF will extend additional financing beyond the $44 billion already allocated to Argentina. Milei had previously suggested an additional $15 billion, although he has not reiterated this figure recently. However, Caputo indicated this week that new funding could be included as part of the prospective programme.

If the parties reach an agreement, it would mark Argentina’s 23rd programme with the IMF since 1958 and its third since 2018. Historically, the IMF’s interventions in Argentina have faced criticism, as many past agreements failed to stabilize the economy. Successive governments often violated programme objectives, raising doubts about the effectiveness of IMF support in the country.

President Milei and his chief negotiator, Caputo, have a history of strained relations with the IMF. Earlier this year, Milei publicly criticized Rodrigo Valdes, one of the IMF’s senior officials, leading to Valdes stepping back from negotiations. Similarly, Caputo clashed with the IMF during his tenure as finance minister in 2018, particularly over exchange rate policies, which eventually prompted his resignation after a short stint as central bank governor.

Despite these tensions, the IMF has commended the Milei administration for implementing measures to cut spending, reduce inflation, and narrow gaps between the country’s various exchange rates.

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Trump threatens tariffs on the EU over energy purchases

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U.S. President-elect Donald Trump has issued a warning to the European Union (EU), stating that the bloc may face tariffs if it does not increase its purchases of U.S. oil and gas on a “large scale.”

“I told the European Union that they must close the enormous gap with the United States by buying our oil and gas on a large scale. Otherwise, TARIFFS!!! in every way!!!” Trump declared in a post on the Truth Social platform on Friday.

European Commission President Ursula von der Leyen previously suggested that the EU could explore the possibility of importing more liquefied natural gas (LNG) from the U.S. “We still buy a lot of LNG from Russia, and why not replace it with American LNG, which is cheaper for us and lowers our energy prices?” von der Leyen remarked to reporters in November.

An EU official, speaking to the Financial Times (FT), noted the peculiarity of Trump’s threat, given von der Leyen’s earlier openness to the idea of increasing LNG imports from the U.S.

Currently, the United States is Europe’s largest supplier of LNG, though Russia remains the EU’s second-largest source. The possibility of replacing Russian LNG with U.S. imports aligns with the EU’s efforts to diversify its energy sources.

Trump has also floated the possibility of a general tariff of up to 20% on all non-Chinese imports, which could have significant implications for EU-U.S. trade relations.

In November, European Central Bank President Christine Lagarde urged European leaders to engage with the U.S. on trade matters, including tariffs, and to consider purchasing more U.S.-manufactured goods. This call for cooperation echoes measures taken during Trump’s first term, when then-European Commission President Jean-Claude Juncker pledged to buy more U.S. gas to avert the risk of a trade war.

Global oil prices have shown sensitivity to these developments. On Friday, international oil benchmark Brent crude prices dropped 0.4% to $72.61 per barrel, while West Texas Intermediate (WTI) futures also fell 0.4%, trading at $69.14 per barrel.

The U.S., currently the world’s largest producer of crude oil and exporter of LNG, has been strengthening its energy trade partnerships. Buyers, including the EU and Vietnam, are reportedly considering increased fuel purchases from the U.S., partly to mitigate the risk of potential tariffs.

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London pushes for continued U.S. support to Ukraine amid leadership transition

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UK Prime Minister Keir Starmer urged Donald Trump on Wednesday to ensure that Western allies “stand together” in supporting Ukraine against Russian aggression.

During a phone call with the U.S. president-elect, their second conversation since Trump’s electoral victory in November, Starmer emphasized the importance of unified support for Ukraine, stating that “allies must stand with Ukraine… and ensure that Ukraine is in the strongest possible position.”

A spokesperson for the British Prime Minister’s Office described the discussion as highlighting a “shared desire to strengthen the close and historic relationship between the United Kingdom and the United States.”

Starmer began the call by congratulating Trump on his recent team appointments. Trump responded by “warmly recounting” his recent meeting with Prince William, Prince of Wales, in Paris earlier this month, according to the Prime Minister’s Office.

As Trump prepares to take office next month, he has expressed intentions to seek a deal to end the war in Ukraine, though he has also publicly criticized certain Western policies, including the approval of missile supplies to Ukraine for use on Russian soil.

In an interview with The Sun on Tuesday, Starmer expressed hope to revive trade talks with the incoming U.S. administration. These negotiations had stalled two years ago under President Joe Biden. The leaders also expressed mutual anticipation of meeting in person “at the first opportunity.” According to the i newspaper, Starmer may visit the U.S. in early February.

Meanwhile, The Telegraph reported that Starmer’s chief of staff, Morgan McSweeney, conducted private meetings with senior members of Trump’s team earlier this month. McSweeney traveled to Florida to meet Susie Wiles, Trump’s chief of staff-designate, who played a pivotal role in managing his re-election campaign. He also held discussions in Washington with Congressman Mike Waltz, Trump’s incoming National Security Adviser.

A senior source in the Prime Minister’s Office described the interactions as “very warm,” adding that “President Trump has a warm approach to the UK. As the year draws to a close, the Starmer team is confident that the UK is well-placed for a strong bilateral relationship with the new president.”

Starmer’s delegation to the U.S., which began on December 2, included Jonathan Powell, former chief of staff to Tony Blair and now Starmer’s national security adviser. Together with McSweeney, Powell engaged in policy discussions on Ukraine, China, and the Middle East, identifying areas of alignment and divergence between the two leaders.

According to The Telegraph, those close to Starmer believe Trump is currently in “listening mode” on Ukraine, carefully evaluating strategies to fulfill his campaign promise of resolving the conflict “on day one” of his presidency.

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