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    Learning how to swim: China vs. Turkey

    Güven Sak, PhD04 July 2021 - Okunma Sayısı: 501

    2021 is the centenary of the establishment of the Communist Party of China (CCP). It is also the centenary of the first constitution of modern Turkey.

    Accepted in January 1921 by the Grand National Assembly, the constitution was a response to the Sevres Treaty signed by the Istanbul government in August 1920. The Sevres treaty essentially divided the remaining territories of the Ottoman Empire between the imperial powers, while the constitution was an assertion of independence. It was also a confrontation of legitimacy between the officials of the Empire and the Imperial Dynasty.

    Treaties to end the first World War bears the names of different districts in Paris. The Germans got Versailles, the Turks got Sevres, the Hungarians got Trianon, the Austrians got Saint Germain. It’s also worth noting that China was furious over the treaty of Versailles. The treaty gave Shandong, a formerly Chinese territory captured from the Germans, then by the Japanese, back to Japan. This was deeply offensive to the Chinese, and there were large student protests in the country against the treaty. Those student protests led to the establishment of the Communist Party of China (CPC), by the way.

    Sevres was torn up through the revolution in Anatolia. Chinese diplomats eventually refused to sign the peace treaty in Versailles. It took two years for the uprising in Anatolia to establish the Republic of Turkey in 1923. Yet it took 28 years for Chinese Communists to establish the People’s Republic of China in 1949. Diplomatic relations between our two Republics started in 1971, the year that U.S. Secretary of State Henry Kissinger first visited China.

    Our two countries started to integrate into the global economy with reforms in the early 1980s. Yet they took different routes towards global economic integration. China had a more planned and cautious approach, a global integration by design. Turkey meanwhile, let global developments shape its economic transformation, a sort of integration by interaction. Deng Xiaoping, after all, said to "cross the river by feeling the stones", while Turgut Özal said to "throw the child into the water" to teach him to swim.

    Which approach was more successful? I think the answer is clear. Today, the GDP per capita of 1.4 billion Chinese is higher than that of 82 million Turks.

    When I first visited China in 2014, I thought that this was a country that had solved its infrastructure problems, an important deficiency in so many developing countries, including Turkey, I have to say. This may also be the reason why infrastructure investments are a major focus of China in developing countries, especially in Africa and Asia.

    My second impression at the time was how market-based policy implementation in China was. This is a bit counterintuitive. While there has always been a top-down decision to focus on specific new technologies, project selection at Chinese incubation centers has been done with the objective of creating the highest value in the shortest time. Performance is always measured by the number, no different from Silicon Valley. That’s what brings dynamism to Chinese economy, as far as I can see.

    Third, it is about taking the long view and making corrections along the way. This policy framework has changed China from a low income to high middle income country. Integration by design worked well for China.

    US and China are like the two wings of global growth today. That’s why I don’t think a Cold War as it occurred in the 20th century is possible between the two.

    Turkey meanwhile, having “jumped into the water,” has had its own version of dynamism. Even during the pandemic, Turkish industry has been doing quite well. Exports are about to set a new record in 2021 breaking the 200 billion barrier.

    FDI inflows are declining to a two-decade low due to rule of law issues, but HepsiBurada a Turkish online shopping platform was recently quoted at NASDAQ with a $3.9 billion valuation, making it one of the hottest Turkish companies. An online delivery startup GETİR set up operations in London, Paris and Berlin. Its impressive business plan has attracted international investment. The child thrust into the water may have almost drowned at times, but he can now swim with the best, even in choppy waters.

    The realignment we are seeing on both sides of the Atlantic is not solely to be based on security, but on economic, social and technological factors. Is it possible to stop the technological innovation in China? No. Unlike the Cold War, this is not going to be about sheer competition. It is going to be about a new form of cooperation.

    Can Turkey side totally with China in this realignment? Again, no. Being an integral part of the Western Alliance, Turkey cannot do that. It’s not only about the Chinese treatment Uyghurs, a people dear to our Turkish hearts, but also about Turkey’s savings deficit and the depth of US dollar markets.

     

     

    This commentary was published in Hürriyet Daily News on 03.07.2021

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