"Turkey is weathering the storm of a catastrophic currency crisis through tighter trade integration with China," writes David P. Goldman.

Despite a catastrophic currency devaluation and 50% annual inflation as of December, Turkish manufacturing is booming and exports have risen by more than half from pre-pandemic levels.

A real economic boom in the midst of financial disaster is puzzling, but there’s a simple explanation: Turkish manufacturing doesn’t have much to do with Turkey. It buys Chinese capital equipment and semi-finished goods and sells the finished products to Europe.

Turkey has found a niche in the fast-growing trade relationship between Europe and China as a producer of steel products, chemicals, household appliances and other goods, concentrating on more labor-intensive and environmentally problematic industries.

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