The reason behind BYD's cancellation of its Turkey investment revealed

Chinese automotive giant BYD had been preparing for some time to establish a production hub in the Turkish market. In a formal ceremony held in July 2024, with the participation of AKP Chairman and President Recep Tayyip Erdoğan, a protocol was signed for a 1 billion dollar production facility in Manisa. With this protocol, BYD had obtained various tax and customs advantages in the Turkish market.

However, no concrete steps were taken for the factory over the past two years. Finally, BYD announced that it had suspended its investment in Turkey. It is stated that there are two main reasons behind the company's decision to take this significant step.

TENSIONS WITH THE US AND DIPLOMATIC PROCESSES

According to a report by Ragıp Soylu from Middle East Eye, it is alleged that pressure from the US was primarily influential in the cancellation of the investment. Beijing, keeping alive the memory of the period when Turkey terminated a 3.4 billion dollar air defense system deal with China in 2015 following intense US pressure, argues that this process created a trust issue in relations. Chinese officials characterize the aforementioned cancellation decision as a primary indicator of concerns regarding whether Turkey is a reliable trade partner.

Another significant factor is Turkey's stance regarding China's human rights policies in the Xinjiang Uyghur Autonomous Region. Ankara's avoidance of openly opposing policies affecting approximately 12 million Uyghur Turks has proven insufficient to gain Beijing's trust. While international human rights organizations define the Chinese government's practices in Xinjiang as genocide, it is stated that Turkey has pursued a more cautious and quiet diplomacy on this issue.

THE FUTURE OF THE INVESTMENT IS UNCERTAIN

Following all these developments, the BYD production facility project in Manisa has been halted for the time being. Both political and diplomatic risks raise questions about whether the project will ever return to the agenda. Turkey, for its part, is planning new steps to ensure the stability of the investment environment.

News Source: 12punto