Chinese investment in Turkey: the Belt and Road Initiative, rising expectations and ground realities

Abstract

Turkey's inclusion in the Belt and Road Initiative in 2015 has raised the expectations of Turkish businesses and government concerning growth-generating investment from China. Existing studies on Chinese investments in Turkey lack sufficient data on the volume of investment, types of firms, and sectoral composition. Based on a novel dataset of Chinese investments in Turkey, this article contributes to filling this gap. We show that although Chinese investment in Turkey has increased considerably in recent years, it remains quite modest compared with investments from the West. Moreover, despite the expanding activities of Chinese technology companies, more than half of Chinese investment in Turkey consists of low value-added manufacturing, extraction of raw materials, and marketing of Chinese products. Overall, the developmental potential of Chinese investment in Turkey has not been radically different from other countries' investments.