(CTN News) – Alibaba, the Chinese e-commerce giant, plans to invest $2 billion in Turkey, according to multiple media reports on Monday. This is the latest sign that economic ties between Turkey and China are strengthening.
Following a meeting with Turkish President Recep Tayyip Erdogan at the end of last week in Istanbul, Alibaba Group Holding Limited’s president, Michael Evans, announced the investment following a meeting with him.
Several Turkish media outlets, citing a Trendyol statement as a source, have reported in recent days that Evans has expressed confidence in Turkey’s economic fundamentals and that his company has already invested $1.4 billion in the Turkish market through its Turkish subsidiary Trendyol.
A request for information on when Trendyol will invest in the company was not responded to by Al-Monitor.
Alibaba announced in 2018 that it had acquired a majority stake in Trendyol. After raising money from the sovereign wealth fund of the United Arab Emirates, ADQ, as well as the Qatar Investment Authority, the company is estimated to be valued at $16.5 billion by 2021.
As a multinational technology company based in Hangzhou, China, Alibaba has a strong presence in the e-commerce sector.
It is noteworthy that the investment news is the latest indication of Turkey and China’s improving relations.
Alparslan Bayraktar, the Turkish Energy Minister, said last week that Turkey is nearing an agreement with a Chinese company to build a nuclear power plant in the country.
It was in the last week of July that the Chinese Foreign Minister Wang Yi visited Ankara to discuss economic ties with Erdogan.
A few weeks ago, Erdogan also criticised the project of the India-Middle East-Europe Economic Corridor. A rail and shipping project backed by the US aims to compete with China’s Belt and Road Initiative. However, it bypasses Turkey in order to accomplish its goal.
Evans’ reference to Turkey’s “sound economic fundamentals” comes in the aftermath of notable changes in Turkey’s Alibaba economic policies following the reelection of Erdogan in May.
Hafize Gaye Erkan, the new governor of the central bank, has raised interest rates three times this year under his leadership. The bank, under the leadership of Erdogan, has refused to raise interest rates in spite of sky-high inflation for years.
A number of taxes were also raised by the government in July in response to a massive budget deficit, and a lira protection scheme was gradually phased out in August. Several years have passed since the value of the lira plummeted.
Turkey’s economic policies were praised by the World Bank earlier this month, and it announced plans to add another Alibaba $18 billion to its exposure to the country.
As Mustafa Sonmez reported in an exclusive for Al-Monitor on Saturday, the Turkish central bank is considering a rate increase of up to 10 percentage points.