turkey chinese economic model

Written by Necati Demircan 11:47 am Current Affairs, Published Content, Research Papers

Implementing the Chinese Economic Model in Turkey

President Erdogan is seeking to incorporate the Chinese economic model in Turkey. As such, Turkey will abandon high-interest rates and turn to production and exports. Opposing parties have cited this proposal to be unquestionably authoritarian. The author, Necati Demircan, explores Turkey’s abandonment of the neoliberal economic model and the new slogan of production in the country’s orientation towards Asia.
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About the Author(s)
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Mr. Necati Demircan is a PhD student in the Department of Global Studies at Shanghai University. He is an author of Quixote Globe and editor of the Belt & Road Initiative Quarterly. He also writes articles for the Turkish daily Aydınlık newspaper. His research interests mainly focus on Chinese and Turkish foreign policies.

The End of Neo-liberal Politics in Turkey

Turkish President Recep Tayyip Erdogan announced the roadmap for the economy at the AKP’s Central Executive Board meeting, stating that Turkey will follow the Chinese economic model of growth which will increase production and exports by attracting foreign investments.1 In fact, this situation heralds a great transformation for Turkey.

It is the struggle for national independence for the Turkish economy, which has been dependent on imports and hot money since 1980. When AKP came to power in 2002 after the 2001 economic crisis, a large influx of foreign capital was witnessed in Turkey. However, Turkey’s confrontation with the West since 2014 caused hot money to leave Turkey.

In any case, it was not possible for Turkey to accept its disagreements with the US such as the PKK, the PYD, the Eastern Mediterranean, and FETO. In the Turkish economy, 152 billion 329 million dollars of hot money in 2013 fell to 30 billion dollars in August 2021.2 As Turkey’s tensions with the US increased, the hot money taps closed. The Turkish lira has lost 117 percent of its value against the dollar in the last three years.

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Turkey Chooses the Chinese Economic Model

Since 2018, Erdogan has repeatedly emphasized that the economic crisis is an economic war of independence. President Erdogan, for the first time, described the rise of the dollar due to the priest Brunson crisis between the US and Turkey as the war of independence in the economy.3 The former US President Donald Trump had even threatened to destroy Turkey’s economy in a letter he wrote to President Erdogan.4

Since Turkey’s conflict with the US would continue, it was not possible to sustain the old economic methods based on hot money. The only solution was to build an economy that could stand on its own feet. As an old Turkish saying says, “bad neighbor makes a man the owner of the house”. Turkey’s confrontation with the West played a positive role in the development of the national defense industry.

Now, it has paved the way for Turkey to move from a consuming free-market economy to a producing national economy. Speaking at the 2022 Parliamentary Budget Talks, AKP Deputy Chairman Numan Kurtuluş stated that Turkey had become an import market. He stated that since May 2013, Turkey has started to abandon the neoliberal economic thesis.5

On the other hand, President Erdoğan, in his TRT special broadcast on December 30, said, “There are global funds entering the country on a short-term basis; that is, we call it hot money. This hot money may temporarily lower the exchange rate. But it is not ideal for us. After a while, the exchange rate will rise. We are the new economy. With the model, we are now pushing the hot money policy, which will give high interest, with the back of our hand”.6

The Approach of the Parties

The Nationalist Movement Party (Milliyetçi Hareket Partisi) and Vatan Party support the policy of the government to eliminate the economic model based on the hot money economy and to make a production revolution. DEVA Party Chairman Ali Babacan interpreted Erdogan’s statements as the impoverishment of the citizens of the country. Babacan said, “It is a Chinese model, there is no such thing. We will both grow and the welfare of our citizens will increase. We will both grow and be free.”7

In fact, what Babacan interprets as freedom advocates the continuation of the liberal free-market economic order. Considering that Metin Gürcan, one of the founders of the DEVA party, wrote secret reports to the US for $400, this stance is not surprising. CHP spokesperson Faik Öztrak claimed that Erdogan tried turning a country negotiating membership of the European Union into a cheap labor country.8

Erhan Usta, Deputy Chairman of the IYI Party, stated that the government of Turkey brought some economic models such as the “new economy program”, “new model” and “Chinese model” to the agenda, but they all exploded in their hands. HDP Co-Chair Mithat Sancar said that the new economic model would turn Turkey into a cheap labor paradise.9

Future Party Chairman Ahmet Davutoğlu of Turkey interpreted the Chinese economic model as a fallacy. Davutoğlu stated that China has reached this point by gradually using the poor people as labor force and that this system is only implemented in authoritarian countries.10


President Erdogan’s option to turn the Turkish economy towards production is an absolute necessity. It is impossible to achieve economic stability with the old free economic order. While pushing Turkey’s irreconcilable contradictions with the West politically to Asia, it showed signs of a complete rupture economically.

Considering the similarity between the Chinese economic model and Atatürk’s understanding of statist and populist development, Turkey could turn it into its own national essence. The situation in Turkey is also a reflection of the breakdown in the global system due to the Covid-19 pandemic and the economic trend that has been going on since 2008 has also led to statist policies.

Turkey emerged from the economic depression of 1929 with statist policies. During the same period, Kemalist statism had achieved great development in Turkey. Turkish politics is in the struggle of two camps. On one hand, the AKP, MHP and Vatan parties advocate building a national economy by breaking away from neoliberal economic policies.

On the other hand, CHP, IYI, HDP, DEVA, Future parties hope to benefit from the neoliberal policies of the US, which is deeply tied to the hot money economy. The struggle between these two camps is a struggle between heading towards Asia and holding on to the Atlantic. The fact that the CHP, founded by Atatürk, objected to the policy in its roots also shows the changing domestic political structure of Turkey.


[1]Hürriyet, “Erdoğan ekonomide yol haritasını anlattı: Çin de böyle büyüdü,” https://www.hurriyet.com.tr/gundem/erdogan-ekonomide-yol-haritasini-anlatti-cin-de-boyle-buyudu-41952854

[2] Hakan Topkurulu, “Türkiye ‘Üretim Devrimi’ rotasına girdi,” https://www.aydinlik.com.tr/koseyazisi/turkiye-uretim-devrimi-rotasina-girdi-265815-1#4

[3] TRT Haber, “Cumhurbaşkanı Erdoğan’dan ‘erken emeklilik’ açıklaması,” https://www.trthaber.com/haber/gundem/cumhurbaskani-erdogandan-erken-emeklilik-aciklamasi-389460.html Also see: T24, “Cumhurbaşkanı Başdanışmanı: Ekonomik kurtuluş savaşını veriyoruz,” https://t24.com.tr/haber/cumhurbaskani-basdanismani-ekonomik-kurtulus-savasini-veriyoruz,677532

[4] The Guardian. “Donald Trump’s bizarre, threatening letter to Erdoğan: Don’t be a fool,” https://www.theguardian.com/us-news/2019/oct/16/trump-letter-erdogan-turkey-invasion.

[5] Aydınlık, “AK Parti Parti Genel Başkanvekili Numan Kurtulmuş: ‘Neoliberal tezlerin yüksek faiz düşük kur sarmalının içine düşmeyeceğiz,” https://aydinlik.com.tr/haber/ak-parti-parti-genel-baskanvekili-numan-kurtulmus-neoliberal-tezlerin-yuksek-faiz-dusuk-kur-sarmalinin-icine-dusmeyecegiz-266881-3

[6] Youtube, “Cumhurbaşkanı Recep Tayyip Erdoğan Özel Yayını-30.11.2021” (15.00-15.57) https://www.youtube.com/watch?v=bu8e80Yu9D8

[7] T24, “Babacan’dan Erdoğan’a ‘Çin tipi büyüme’ yanıtı: Perinçek’i destekleyen basın çok beğenmiş; kendi vatandaşını fakirleştiren büyüme modelini reddediyoruz,” https://t24.com.tr/haber/babacan-dan-erdogan-a-cin-tipi-buyume-modeli-yaniti-kendi-vatandasini-fakirlestiren-buyume-modelini-reddediyoruz,998332

[8] CHP Official Website, “CHP Sözcüsü Öztrak: “Erdoğan Ekonomiye Çin İşkencesi Yapıyor,” https://www.chp.org.tr/haberler/chp-sozcusu-oztrak-erdogan-ekonomiye-cin-iskencesi-yapiyor

[9] Gerçek Gündem, “Bütçe görüşmeleri sert başladı: ‘Ülkeyi satmak diyorsanız budur’,” https://www.gercekgundem.com/siyaset/316505/butce-gorusmeleri-sert-basladi-ulkeyi-satmak-diyorsaniz-budur

[10]Independent Türkçe, “Davutoğlu: Çin modeli safsatadan ibaret,” https://www.indyturk.com/node/445011/haber/davutoğlu-çin-modeli-safsatadan-ibaret


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