According to the consolidated data of the machinery manufacturing industry shared by the Machinery Exporters Association (MAIB), Turkey's total machinery exports, including free zones, in the first quarter of the year was 6.9 billion dollars. Pointing out that the stress on economies has begun to decrease with the arrival of spring in the northern hemisphere, Machinery Exporters Association President Kutlu Karavelioğlu said, “Since the understanding of strategic protectionism fuels conflicts of interest between the poles, new cooperation opportunities are created between countries that have established close relations on the same axis. Turkey's importance is increasing, especially in the European Union, which hopes to loosen its unilateral ties with Chinese companies. This situation will create an absolute difference in China's view on investment in Turkey. "It will be a natural consequence that protective policies in line with global trends will attract investment to our country, especially to our sector," he said.
According to the consolidated data of the machinery manufacturing industry, at the end of the first 3 months of the year, Turkey's total machinery exports, including free zones, exceeded 850 thousand tons and reached 6.9 billion dollars. Machinery exports, which increased by 9.6 percent and 19.1 percent respectively in the first quarters of the last two years, closed the same period this year with a 2.5 percent minus due to the 150 million dollar decrease in March.
In the first quarter, there was a 25 percent increase in turbines and turbojets, a 17 percent increase in heaters and ovens, and a 16 percent increase in textile and clothing machinery, among the main commodity groups. In the same period, export revenue loss was 104 million dollars for electric motors and generators, 83 million dollars for domestic and industrial refrigeration machines, and 33 million dollars for tractors and agricultural machinery. While the increase in exports to the USA, one of Turkey's top machinery export countries, continued, there were 20 percent decreases in the Russian and Italian markets compared to the same period last year.
“The wind is still blowing from the opposite direction”
Kutlu Karavelioğlu, President of the Machinery Exporters' Association, stated that they were pleased to have survived the first quarter, when the state of caution reached its peak in global investments, with a limited decline in machinery and equipment exports, and said:
“Since the second half of last year, the wind has continued to blow against the industrialists due to global inflation, high interest rates and geopolitical risks. Although the risks related to regional conflicts have increased rather than decreased in the intervening period, it seems that the stress on the economies in the northern hemisphere has begun to decrease with the spring. Last year, for the first time since the pandemic, machinery and equipment investments in the world contracted by 2 percent, and machinery manufacturing and exports contracted by 1 percent. We think that these data will catch up with the performance of 2022, with the acceleration in economies in the coming months. Even though the effects of the trends turning horizontal in the last quarter of 2023 have not been completely erased, we cannot talk about inertia to be worried about as a sector that can increase its investments by 13 percent, its production by nearly 9 percent, and as a result, its exports by 11 percent. Thanks to its level of integration with developed countries, the Turkish machinery sector will be quickly affected by the recovery that will start with interest rate cuts in the European Union and the USA. "With its competitive structure, Türkiye will maintain its place among the countries that provide above-average increases."
“EU puts an end to unilateral relations”
Pointing out that a phenomenon that is evident in the world, although it does not attract as much attention as regional conflicts, is the hegemonic struggles in the fields of trade, production and technology, Karavelioğlu said:
“As the globalization crisis, which became visible before the pandemic, deepens; In the struggle between the EU, the USA and China, new division of labor scenarios are coming to the fore for developing countries. Since the understanding of strategic protectionism fuels conflicts of interest between the poles, new cooperation opportunities are created between countries that establish close relations on the same axis. "Turkey's importance is increasing, especially in the European Union, which hopes to loosen its unilateral ties with Chinese companies."
Karavelioğlu, citing as an example an investigation launched by the European Commission in Romania against a consortium including Chinese companies, said:
“The European Commission has been harshly criticizing China for a long time on the grounds that it does not implement liberal foreign trade policies. The EU does not want to tolerate anymore that China not only causes unfair competition with the support and incentives it implements as a secret state policy, but also makes regulations that will hinder foreign investors in its country. For this reason, the introduction of some sanctions in Europe and the corresponding restrictions on Chinese companies in certain areas are developments that we have been waiting for for a long time. We began to frequently encounter the manifestations of this struggle, which is increasingly taking shape, in sectoral meetings where irregular and one-sided interest relationships are loudly complained about. The will of EU countries to diversify their supplies and suppliers, especially in machinery manufacturing, has put Turkey under the spotlight again. At this point, it is a great chance for Turkey that our sector is active on issues such as the European Green Deal and Border Carbon Regulation, and that our Exporters' Association takes an integrative role and starts early to prepare our members for the new process.”
“Investment in Turkey should come from China as well as the EU”
Pointing out that Turkey had a deficit of 11.7 billion dollars last year from machinery trade alone to China, against whose aggressive policies Europe aims to be more cautious, Karavelioğlu concluded his words as follows:
“In 2023, when internal and external tariff barriers increased worldwide in addition to the economic recession, we sold 11.4 billion dollars of machinery to the EU, from which we imported 20.9 billion dollars of machinery.
The amount of machines we could sell to China, from which we bought 11.9 billion dollars worth of machines with an increase of 18.8 percent in the same year, remained at 155 million dollars due to high customs walls. On the one hand, the favor shown by the EU, to which we make 41 percent of our exports, towards our machines with the highest added value, and on the other hand, the obstacles we face in China, from which we make 26 percent of our imports... Finally, the EU has started to complain about the one-sided trade we have been suffering from for years. We expect this to make an absolute difference in China's perspective on investment in Turkey. With the impact of the measures in the import regime, there was a 9.1 percent decrease in our country's machinery imports from China and a 33.9 percent decrease in its imports from India in the first two months of the year. "It will be a natural consequence that protective policies in line with global trends will attract investment to our country, especially to our sector."
