China-Turkey Tensions Rise After BYD Halts EV Plant Project

Relations between China and Turkey have deteriorated following the abrupt cancellation of a major electric vehicle investment deal worth one billion dollars. The project, which was intended to establish a manufacturing hub in Manisa, has been officially paused by Chinese giant BYD Company Ltd as the firm shifts its production focus entirely within the European Union. This strategic pivot comes after Turkish President Recep Tayyip Erdo?an secured the agreement in July 2024 with ambitions of transforming Turkey into an EV centre.

The decision to halt the Manisa facility marks a significant blow to Beijing’s economic ties with Ankara, which have long been characterised by mutual benefit. For years, China and Turkey maintained a cordial partnership underpinned by trade volumes exceeding forty-five billion dollars in 2025 alone. Turkey served as an attractive destination for Chinese capital due to its membership of the EU Customs Union, allowing goods produced there to enter Europe without additional customs fees. This arrangement helped Turkish manufacturers circumvent new tariffs levied on direct imports from China. Furthermore, Turkey’s location along the Middle Corridor transport network provided a logistical advantage that shortened supply chains and shipping times compared to traditional ocean routes.

Despite these established benefits, BYD chose to prioritise its expansion inside the EU bloc over continuing operations in Turkey. The company plans to commence assembly at a new plant in Szeged, Hungary, during the fourth quarter of 2026. This facility is designed to produce one hundred and fifty thousand units annually before capacity doubles later on. By manufacturing within the European Union, BYD aims to avoid the twenty-seven per cent tariff imposed on Chinese-made electric vehicle imports. While Turkey’s Customs Union agreement offered some protection against trade barriers, it proved insufficient to bypass specific regulations requiring vehicles to be labelled as ‘Made in Europe’.

The fallout from this decision has prompted Beijing to launch a significant propaganda campaign and charm offensive aimed at mitigating the backlash in Ankara. Following reports by Middle East Eye, the Chinese embassy in Ankara began distributing unsigned promotional articles through pro-government media outlets. These pieces emphasised high-level cooperation between the Communist Party of China and Turkey’s ruling Justice and Development Party. Additionally, state-funded organisations arranged an eight-day trip for Turkish journalists to visit Xinjiang. The resulting coverage largely omitted human rights concerns regarding the Turkic-Muslim community in that region, focusing instead on local counter-terrorism efforts and economic integration.

This diplomatic effort follows a history of Ankara often muting criticisms of Beijing’s actions in Xinjiang to secure investment lines during economic difficulties. A comprehensive United Nations report from 2022 found credible evidence suggesting crimes against humanity may have been committed by Chinese authorities there, with estimates placing the number of detainees at over one million.

While these public relations moves seek to repair damaged ties, experts suggest Turkey will likely continue its balancing act between Beijing and Western allies due to worsening economic conditions. Recent diplomatic successes for Ankara include hosting a NATO Summit in the capital and seeing sanctions lifted by the United States. However, the country currently faces major headwinds including high inflation and depleted international reserves.

In response to BYD abandoning the project without making progress on site, Turkey’s Ministry of Industry and Technology recently revoked the company’s import tax benefits. Consequently, local sales for the Chinese firm have plummeted in Türkiye, causing it to lose its leading position in the plug-in hybrid segment to the domestic Turkish brand Togg.