The Evolution of Trade Relations Between Turkey and the People’s Republic of China, and the Impact on Sectoral Employment in Manufacturing in Turkey

The trade balance between Turkey and the People‟s Republic of China (PRC) has been steadily deteriorating against Turkey since the early 1990‟s, when trade relations between these two countries started to gain momentum. In this study, the sources of this ongoing imbalance and the resulting effects on the Turkish economy are examined from different perspectives, namely the sectoral concentration of trade, the intra-industry trade, and the factor content analyses. According to the findings, ever since the trade relations picked up between these two countries, imports from the PRC into Turkey have always been more diversified than exports from Turkey into the PRC. Since the mid-2000‟s, they have exhibited diversity particularly in mid-high and high-technology manufacturing sectors. Moreover, the changing structure of trade between Turkey and PRC since the early 2000‟s has impacted employment in all manufacturing sectors negatively without any exception, and the strongest hypothetical impact can be observed in high-technology sectors. One of the notable results of the study points out that although the weakest “direct” China employment effect in Turkey is encountered in low-technology sectors, third-country-induced “indirect” China effect in these sectors proves to be dominant.